BREAKING: Paris attacker shot dead by police after stabbing a teacher to death.

According to French media, a man was decapitated on a street in the Conflans St Honorine area at about 5pm local time.

The country's anti-terror prosecutor has called the incident a stabbing but the Reuters and AP news agencies reported the victim was decapitated, according to police sources.

A second police source told Reuters that witnesses heard the attacker shout Allahu Akbar, or God is greater.

A terrorism investigation is underway, AP reported.

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