Eight people were also injured, three of whom were in critical condition in the evening, according to a latest report.
The alleged perpetrator of this attack, whose motives are still unknown, was arrested and placed in police custody for "assassination and attempted assassinations", told AFP the Prosecutor's Office of Lyon.
According to a police source, it would be an Afghan asylum seeker, unknown to the police and intelligence services.
For the moment, the case has not been transferred to the National Anti-Terrorist Prosecutor's Office (PNAT) for trial as an act of terrorism, but this court is assessing the situation.
Authorities initially reported a second suspect on the run, but the prosecution and a police source later denied the existence of a second assailant.
Difficult work for rescuers
The attack occurred around 16:30 around a metro station in Villeurbanne, a town bordering Lyon, one of the three major cities in France.
The metro exit leads to a large esplanade which is bordered by an avenue and parking. Nearby is the Astroballe, the Asvel Basketball Hall, the Villeurbanne Club.
"There was a gentleman at the stop of the (bus) 57 who began to stab in all directions," told AFP a girl to the tanker stained with blood.
"He managed to touch, to open the belly of a person. He stabbed a guy in the head, he opened a lady's ear and the lady was dying on the bus stop and no one came to help me " she reported, sobs in her voice.
People fled, took refuge where they could, in particular buses, making difficult the work of the relief, reported the firemen.
Of the wounded, three are in absolute emergency and five less seriously injured, according to the prosecution.
Twenty people in shock were also taken care of by firefighters.
An AFP journalist saw a body packed in a body bag and taken on board an ambulance, and traces of blood on the ground near the subway station, around which a large security perimeter was in place. .
The authorities cautious about the reasons
The mayor of Lyon and former Minister of the Interior Gerard Collomb went to the scene. He called for "remaining very cautious" about the terrorist nature or otherwise of this "knife attack" during a brief statement to the press.
He asserted that the perpetrator, "quite suddenly", was "apparently under the control of both the people who were there, the security services of the TCL (local transport network), at the time where he was going to flee to the subway.
In May, the explosion of a parcel bomb in the heart of Lyon had injured 14 people and aroused strong emotion in the city until then spared the wave of jihadist attacks (251 dead) that struck France from 2015.
The suspect, a 24-year-old radicalized Algerian Mohamed Hichem Medjoub, has been charged and imprisoned. To the investigators, he said he "pledged his allegiance" to the jihadist group Islamic State (IS), acknowledging having made and deposited the explosive device in front of the bakery of the center of Lyon, according to the Paris prosecutor's office.