The two men had reportedly been arguing before one drew out a knife and stabbed the other in the neck.
Five passersby quickly performed a citizens arrest on the alleged offender who then began screaming ‘allahu akbar’.
Witness Liam Clifford saw what happened and said the scene was quite confronting.
‘I heard people outside my apartment telling someone to “drop the knife” and then when I went to check they had tackled a man who then started yelling “allahu akbar”,’ Mr Clifford told Daily Mail Australia.
‘I saw the victim going into the ambulance covered in blood from my balcony. It was pretty full on for the area, Moonee Ponds is usually pretty safe.’