The vehicle crashed outside a department store in Rakenstrasse in the Charlottenburg area of the city.
Police identified the driver as a 29-year-old German-Armenian, who eventually crashed the car into a shop window and was detained by bystanders and handed over to the authorities.
The incident occured in Berlin City West at around 10.30am on Wednesday morning.
According to the fire department, one person has been killed and six people have been left with life-threatening injuries.
It has been reported that the person killed was a teacher, who had been with a group of her school children in the street near the Kaiser Wilhelm Memorial Church.
Initial information confirmed a silver-coloured Renault Clio drove into a group of people on Tauentzienstraße.
The car ploughed through the window of a Douglas store and came to a halt.
A spokesperson for the German capital's fire service told Reuters around 30 people were injured.
Emergency services have rushed to the scene
Reuters
The scene in Charlottenburg
FABRIZIO BENSCH
Police said: "A man is believed to have driven into a group of people.
"It is not yet known whether it was an accident or a deliberate act.
The scene of the incident in Berlin
David Atherton/Twitter
The vehicle struck people outside the Kaiser Wilhelm Memorial Church
Twitter/Scott R Gill
"We are currently on the scene with about 130 emergency personnel.
"The vehicle, a small car, was secured on site."
Actor John Barrowman was caught up in the incident, posting a video to his fans via Twitter.
He said: "Update from the horrible situation in Berlin...We are ok. Jb."
In the video, Mr Barrowman added: "We've seen a car that came down the road and ended up in a storefront covering three city blocks.
"It's pretty horrific."
The incident took place near the scene of a fatal attack in 2016 when Anis Amri, a failed Tunisian asylum seeker with Islamist links, hijacked a truck, killed the driver and then ploughed it into a crowded western Berlin Christmas market, killing 11 more people and injuring dozens of others.
