A pensioner has died and two others are injured after a man ploughed a rental car into a crowded square in the German city of Heidelberg.

The driver, who is believed to have been carrying a knife, then fled and was shot after being tracked down by police.

A 73-year-old - who was one of the three people hit outside a bakery on Saturday afternoon - has died of his injuries, police said.

The two others who were hurt in the attack - a 32-year-old man from Austria and a 29-year-old woman from Bosnia and Herzegovina - have been discharged from hospital.

The driver was shot by an officer following a short standoff and taken to hospital.

The identity of the 35-year-old German suspect has not been released.

There was no immediate word on the man's possible motives, where he came from or his condition in the hospital..

A police spokesman said terrorism is not suspected and the man appears to have acted alone.