Police said no one had been injured in the incident close to Prime Minister Theresa May's official Downing Street residence in Westminster but gave no further details. Ms May was not at Downing Street at the time of the incident, her spokesman said.
The incident comes just over a month after a British-born ploughed a car into pedestrians on nearby Westminster Bridge killing four people before stabbing to death a police officer in the grounds of parliament.
Reuters pictures showed police officers standing by at least two knives lying on the ground.
Armed officers sealed off the area. A Reuters reporter and photographer saw police holding a dark-skinned, bearded man dressed in a hooded, black coat. His right hand appeared to have a bandage wrapped around it.
(Reporting by Kylie MacLellan and William James, Writing by Michael Holden, Editing by Estelle Shirbon and Guy Faulconbridge)