Blood-soaked Man 'Shouting Allahu Akbar' Stabs Multiple People In Sydney (photos)

A blood-soaked man screaming 'Allahu Akbar' has gone on a rampage with a knife through central Sydney - allegedly killing one woman inside a unit and stabbing another in the back at a nearby pub.

The dead woman was found inside a Clarence Street apartment, allegedly with her throat slit, after the knifeman was subdued by heroic bystanders about 2pm using chairs and milk crates in Wynyard Street after attempting to stab multiple people.

Police are investigating whether the attacker, believed to be Mert Nay from Blacktown, had escaped from a mental institution.

They do not believe it is terror-related, despite witnesses reporting the attacker was muttering religious slogans including 'Allahu Akbar'.

Dramatic footage showed the man, wearing a grey hooded jumper and holding a large knife, jumping on top of a Mercedes while screaming 'shoot me in the head'.

Brave witnesses were able to tackle the man and pin his head down with a milk crate until police arrived and arrested him as hundreds of workers gathered.