We must assume that an attack on the Israeli consulate had been planned for this morning, says Bavaria's Interior Minister Joachim Herrmann according to German media.
The site of Thursday's shooting is located near the Israeli consulate and a museum with exhibitions about the Nazis' crimes. The geographical connection leads the police to investigate the incident as a terrorist attack that was stopped.
The armed man, who according to German and Austrian media was a "known Islamist", fired several shots before the police shot him. According to media reports, he was armed with an older rifle equipped with a bayonet.
No one else was injured in the incident.
Bavaria's Prime Minister Markus Söder promises protection to Jewish citizens as well as Jewish and Israeli institutions.
We will combat, confront and prevent every attack with great determination, he says according to German media.
It was shortly after 9 am on Thursday when residents in the area heard shots and screams, according to Süddeutsche Zeitung. A large operation was launched, with blockades and police helicopters in the air.
According to Israel's Foreign Ministry, the consulate was closed at the time of the shooting and no staff were injured, reports AP. Israel's President Isaac Herzog has expressed "horror" over the incident.
The incident occurs on the anniversary of the terrorist attack at the Olympic Games in Munich in 1972, when eleven Israeli athletes and one German police officer were killed by the Palestinian terrorist group Black September.
There may be a connection, says Söder according to German Bild.