Australian police officers fatally shot an alleged terrorist in Melbourne after he stabbed and killed two counterterrorism officers on Tuesday.

The terror suspect died on scene after receiving fatal gunshot wounds during an encounter with the Melbourne counterterrorist enforcers outside Endeavour Hills on Tuesday evening.

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According to reports, the suspect was an 18-year-old teen named Numan Haider from Narre Warren who stabbed one officer a number of times after shaking his hand.

He later turned to the other officer and stabbed him twice in the forearm.

The Afghan teen, who was described as an ex-member of the Islamic group Al-Furqan, allegedly had an Islamic State flag with him during the encounter.

"The person in question was a known terror suspect who was a person of interest to law enforcement and intelligence agencies," Federal Justice Minister Michael Keenan stated.

Keenan also explained that the teenager came to the scene on his own and had carried out "an unprovoked attack" on the officers at around 7:45 on Tuesday evening, noting that the shooting officer had been employing self-defense.

The two stabbed officers were part of a Joint Counter Terrorism Team involving the Australian Federal Police and the Victoria state police.

According to Victoria Police Assistant Commissioner Luke Cornelius, the officers had no idea that the teen posed a threat to them and was only expecting "an amicable discussion about that individual's behavior."

The suspect's passport was cancelled several days ago due to national security concerns. He also allegedly displayed a series of behaviors for the past few months that caused "significant concern", prompting authorities to invite him to the police station that evening.

Cornelius clarified that the teen was acting on his own and that there is no need to worry of a possible terrorist attack to hit the community, noting that the violent encounter was an isolated incident.

TagsAustralia, police, Terrorist, Suspect, Dead, teen, Afghan