A major search for the suspect is underway, with residents in the area being told to stay indoors. It also houses much of Vienna's small Jewish community.
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Three people are "seriously injured", according to the Austria Press Agency.
Vienna police said the attack happened at about 7:45 p.m. (1845 GMT; 1 p.m. EST) on Praterstrasse in the heart of Vienna. One man and two women aged between 40 and 50 sustained heavy injuries in the attack and were hospitalized, the Austrian Kurier daily reports, citing a police spokesman.
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The culprit then reportedly fled the scene. Five hours after the attack, Vienna police announced that they had made an arrest over Twitter, although they did not specify who they had arrested.
No motive for the attack has been reported yet.
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Asked what was known about an assailant, he added: "Absolutely nothing".