The attack took place just after midnight outside the Muslim Welfare House, which houses a mosque, on the Seven Sisters Road in the northern part of the city. The site of the incident is close to another mosque near the Finsbury Park on the same road.
Several worshippers were in the area at the time of incident after attending Ramzan prayers.
Eyewitness Abdul Rahman said the driver said he wanted to "kill all Muslims".
"When the guy came out from his van he wanted to escape, run away and he was saying 'I want to kill Muslims. 'I want to kill Muslims'.
"I hit him on his stomach... And then me and the other guys... We held him to the ground until he couldn't move. We stopped him until the police came," he said.
One man was pronounced dead at the scene and eight others were injured. Two others were treated for minor injuries.
"All the victims were Muslim and there are currently no- other suspects," he added.
Earlier, Prime Minister Theresa May said police were treating the van incident "as a potential terrorist attack".
Earlier she described it as a "terrible incident", adding: "All my thoughts are with those who have been injured, their loved ones and the emergency services on the scene."
London Mayor Sadiq Khan condemned the attack.
He said the attack was deliberate and targeted 'innocent Londoners, many of whom were finishing prayers during the holy month of Ramzan'.
The driver of the van was found detained by members of public at the scene and then arrested by police in connection with the incident, a spokesperson for the Metropolitan Police said.
"He has been taken to hospital as a precaution, and will be taken into custody once discharged. He will also be subject of a mental health assessment in due course."
The Muslim Council of Britain has called for extra security around mosques, describing the attack as "the most violent manifestation" of Islamophobia.
The council's secretary general Harun Khan said he expected authorities to step up security "as a matter of urgency", adding many would feel "terrorised" following the incident.
According to the Independent, footage of the incident showed injured people motionless on the pavement as angry crowds surrounded a white man believed to be the driver.
London's transport authority said on Twitter that the Seven Sisters road had been closed due to an "emergency services incident".
The city's ambulance service said in a statement on Twitter that it had sent "a number of resources" including ambulance crews, paramedics and specialist response teams to the scene.
"An advance trauma team from London's Air Ambulance has also been dispatched by car," the statement said.
Another eyewitness, who lives in a flat on the Seven Sisters Road, said the van seemed to have hit people who were coming out of the Finsbury Park mosque after prayers finished, the BBC reported.
Witnesses said the road was "backed up" with police cars, ambulance and fire engines.
Today's incident followed a series of attacks in Britain.
Eight people were killed and 50 injured on June 3 when three Islamist militants drove into pedestrians on London Bridge and stabbed people at nearby restaurants and bars.
On March 22, a man drove a rented car into pedestrians on Westminster Bridge in London and stabbed a policeman to death before being shot dead. The attack killed five people.
Disclaimer: No Business Standard Journalist was involved in creation of this content
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