Police shot Usman Khan dead after his suspected assault that seriously injured three other people was broken up by bystanders -- one armed with a five-foot narwhal tusk and another a fire extinguisher.
Video footage of the confrontation showed Khan, 28, being challenged by a man wielding the tusk -- believed to have been taken from a nearby historic hall -- and sprayed with the extinguisher.
He had been conditionally released from jail last December after serving less than half of a 16-year sentence for terrorism, and was wearing a suspected fake explosive device.
Moments later armed police officers arrived on the scene and shot him dead.
Investigators have said they are not actively seeking others in relation to the incident, which recalled a three-man terrorist assault two years ago on London Bridge that killed eight.
The latest attack came less than two weeks before Britain's general election, and politicians temporarily suspended campaigning.
Security Minister Brandon Lewis said the government would check whether sentences were being dealt with "in a proper way" following Friday's carnage.
"After any incident like this, there has to be and always is, a full review and lessons-learned exercise taken forward," he told BBC Radio.
"We have to let the investigation complete itself first, but that will absolutely happen."
'Bundle him to the ground'
Khan, from Stoke in central England, was handed an indeterminate sentence for public protection in 2012, with at least eight years in prison, along with eight others inspired by Al-Qaeda who had plotted to bomb targets including the London Stock Exchange.
They were also found guilty of making longer-term plans including taking part in "terrorist training" in Pakistan.
But the sentences of Khan and two co-conspirators were quashed by the Court of Appeal in April 2013 and he received a new 21-year sentence, comprising a maximum custodial term of 16 years.
Police on Saturday were reportedly searching a property in Stafford, in central England, thought to be connected to Khan.
Police believe he began the attack at Fishmonger's Hall, a historic building said to contain many ancient artefacts on the north side of the bridge.
It was hosting an event organised by the University of Cambridge's criminology institute on prisoner rehabilitation, attended by Khan, who reportedly arrived with two knives and the fake suicide vest.
Vice-Chancellor Stephen Toope said he was "devastated" that the university's staff, students and alumni may have been targeted.
The Metropolitan Police appealed for witnesses from the event to come forward.
As the attack moved to London Bridge, a throng of people could be seen in videos grappling with Khan on a pedestrian walkway.
Tour guide Stevie Hurst told BBC radio that "everyone was just on top of him trying to bundle him to the ground.
"I saw that the knife was still in his hand so I just put a foot in to try and kick him in the head: we were trying to do as much as we could to try and dislodge the knife," he said.
One man in a suit and tie -- identified by media as a police officer -- was later seen carrying a large knife away.
Attention has swiftly turned to how Khan could have been released from prison after serving less than seven years of his sentence.
Inmates are usually released half-way through the type of determinate sentence he was given, and time spent in custody before trial may have been taken into account.
The Parole Board said it had no involvement in his release and that it appeared to have happened automatically as required by law.
During the attack, Khan wore an electronic tag used to monitor criminal offenders, The Times newspaper reported.
Prime Minister Boris Johnson, who chaired a meeting of the government's emergencies committee late Friday, said he had "long argued" it was a "mistake to allow serious and violent criminals to come out of prison early."
Johnson, who hopes to win a majority in a December 12 election and take Britain of the European Union, praised the emergency services and the public for their response.
On November 4, Britain downgraded its terrorism threat level from "severe", the second-highest of five levels, to "substantial" -- the lowest rating in more than five years.
The 2017 London Bridge attack involved Islamist extremists in a van who ploughed into pedestrians before attacking people at random with knives in nearby Borough Market.
Eight people were killed and 48 wounded. The three attackers, who were wearing fake suicide devices, were shot dead by police.