A truck mowed down people on a cycle path in Lower Manhattan killing at least eight people.
A man who emerged from the vehicle brandishing imitation guns was shot and arrested by police officers.
Police urged people to avoid the area as a major emergency services operation got under way.
NYPD describe the incident as a terror attack, with reports saying the FBI is now leading the investigation.
One witness, identified as “Eugene,” told ABC Channel 7 that he saw a white pick-up truck driving fast down the cycle path alongside the West Side Highway, near Stuyvesant High School, at full speed and hitting a number of people.
The witness also reported hearing about nine or 10 shots.
In a series of tweets, the NYPD described what happened:
“Earlier a vehicle entered the West St. pedestrian/bike path a few blocks north of Chambers St.
“The vehicle struck multiple people on the path. There are several fatalities and numerous people injured.
“The vehicle continued south striking another vehicle. The suspect exited the vehicle displaying imitation firearms & was shot by NYPD
“The suspect is in custody. This is preliminary, more information to follow.”