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A further three were injured in the attack - declared a terrorist incident - and are being treated in hospital.
The suspect, who died at the scene, was wearing what is believed to have been a hoax explosive device, police said.
Videos on social media appear to show passers-by holding down a man. An officer arrives, seems to indicate to the group to move, and fires a shot.
Met Police Commissioner Cressida Dick said the attack began at Fishmonger's Hall on London Bridge, with police called to the incident just before 14:00.
Kirsty Wark speaks to Sir Mark Rowley, Assistant Commissioner for Metropolitan Police Service, 2014-18, and the former national lead on counter terrorism.
Newsnight is the BBC's flagship news and current affairs TV programme - with analysis, debate, exclusives, and robust interviews.
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