The mass stabbing by a man, who has been arrested, took place at Russell Square near the British Museum at 10.39 pm local time last night, Scotland Yard said.
Six people were injured in the attack, but a woman who was treated at the scene was pronounced dead later, police said.
The attacker was arrested at the scene after being tasered by police officers.
Police said that terrorism was one possible motive behind the attack.
"Officers attended the scene along with the London Ambulance Service," the statement said.
Additional police units have been deployed to the area after the attack.
Ambulances and police vans were seen stationed outside Imperial Hotel, near the Russell Square Underground station.
No details have been released yet about the condition of the other victims.
"We await an update on the condition of the other persons injured and details of any other injuries," police said.
The attack came on the same day that Scotland Yard announced that 600 additional armed officers will be deployed around London's major sites, including British Museum, as part of anti-terrorism plans in the wake of terror attacks in Europe.
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