Belgian prosecutors said they launched twin investigation after a knife-wielding man shouting "Allahu Akbar" attacked soldiers in Brussels. The assault is being treated as an act of terrorist.

The assailant attacked Belgian soldiers with a knife in central Brussels on Friday night, according to the Belgian authorities. The man shouted "Allahu Akbar" ('God is great' in Arabic) twice while carrying out the attack, according to Esther Natus, spokeswoman for the federal prosecutor's office.

Soldiers fatally shot the attacker following a close encounter. "One of the soldiers opened fire and hit the man twice. The man later died in the hospital as a result of his injuries," Natus added.

Later on Saturday, prosecutors announced that the first investigation will look at the incident itself, and the second inquiry will see if the soldier who shot the attacker acted appropriately, Reuters reports.

An autopsy was planned for Saturday, the prosecution service said in a statement, adding that prosecutors would make the final decision based on the results and a report by a ballistics expert.

According to the authorities, the 30-year-old man, identified as a Somali citizen, came to Belgium in 2004. Belgian Migration Minister Theo Francken said the man had been granted asylum in 2009 and obtained citizenship in 2015.

The man was not known to have any links to Islamist militancy, but had committed an act of assault and battery in February this year, prosecutors say.

The attack in central Brussels came shortly before two British police officers were attacked outside Buckingham Palace in London.

Police later said the man, in his mid-twenties, was "arrested by police after they spotted a weapon inside his car. The quick and brave actions of both officers meant that the suspect was detained very quickly," Detective Superintendent Guy Collings said on Friday.

London Police say the man who attempted a sword attack outside Buckingham Palace repeatedly shouted "Allahu Akbar" before he was taken down by officers with pepper spray.

The Metropolitan Police confirmed that Friday's events outside the palace of the British monarchy is being treated as a terrorist incident.

The altercation unfolded just after 8:30pm when a man driving a blue Toyota Prius was confronted by officers in a restricted area on Constitution Hill.

The driver of the vehicle is alleged to have reached for a four-foot sword before he managed to be immobilized by police using CS spray. Three Metropolitan police officers received minor injuries during the incident.

A 26-year-old man from the Luton area has been arrested on suspicion of grievous bodily harm, and is being held on terrorist charges, according to a Met Police statement.

"Officers from the Counter Terrorism Command are now investigating and searches are being carried out in the Luton area today [Saturday]," said Commander Dean Haydon, of the Met's Counter Terrorism Command.

"We believe the man was acting alone and we are not looking for other suspects at this stage. While we cannot speculate on what the man was intending to do - this will be determined during the course of the investigation - it is only right that we investigate this a terrorist incident at this time."

The terrorist threat in the UK remains high, following three major attacks in London and Manchester recently.

In June, eight people were killed and scores more injured when a van was deliberately driven into pedestrians on London Bridge. The three perpetrators fled into Borough Market, Southwark to carry out a stabbing spree where they were later shot dead by armed police.