Armed officers raced to the scene in Russell Square on Wednesday night following reports that a man armed with a knife was targeting people.
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A female victim was treated at the scene but pronounced dead shortly after, the Metropolitan Police said.
The man was arrested six minutes later, with one of the officers firing a Taser electroshock gun.
The 19-year-old suspect has been arrested on suspicion of murder and is being detained in a South London police station.
The Met’s Assistant Commissioner for special operations, Mark Rowley, said it had been a “tragic incident”.
“We believe this was a spontaneous attack and that the victims were selected at random”, said Rowley, who is Britain’s most senior anti-terrorism officer.
Counterterrorism police are supporting the investigation, but not leading it, authorities said later.
Mr Khan said police were doing an “incredibly hard job” and the safety of Londoners was his “number one priority”. “We would urge the public to remain calm, alert and vigilant”.
Witnesses described seeing armed police flood the area in the wake of the attack and officers established a large cordon to seal off the square where a forensics tent was later seen. The suspect was taken to hospital, where he was in police custody.
In the terror attacks of July 7, 2005, the underground subway line running close to Russell Square was hit by the most devastating of the four bombs that killed 52 people and injured over 700 others.
Police said earlier that mental illness played a significant part in the attack, however terrorism had not been ruled out. He is now reported to be under police guard in hospital.
“Our police officers are doing an incredibly hard job on our behalf and they have my full support”.
On Thursday, Mayor of London Sadiq Khan urged the people of London to remain calm and vigilant after the knife attack in a city centre of London.
Scotland Yard had announced earlier on Wednesday that an extra 600 armed officers were being deployed on patrol in London after recent terror attacks in France and Germany.
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Police said mental health seemed to be a “significant” factor in the incident.
