Officers were told a man was observed behaving erratically at the Marketplace shops on Lyall Road in Berwick at about 12.30pm today allegedly armed with a knife.
Two people were injured and taken to hospital with non-life-threatening injuries.
Passersby helped restrain the man until police arrived.
“The exact circumstances surrounding the incident are being investigated,” Victoria Police said in a statement.
“It is not believed parties are known to each other.”