A man accused of deliberately ramming a car into pedestrians in a busy Australian city street has been charged with murder after one of the injured died.

Saeed Noori, a 32-year-old Afghan refugee and Australian citizen with a history of drug abuse and mental health issues, had been charged with 18 counts of attempted murder alleging he drove a SUV into pedestrians on a sidewalk in downtown Melbourne last month.

An attempted murder charge was upgraded in the Melbourne Magistrates Court on Tuesday to murder because an 83-year-old man died in hospital. Another three victims remain in hospital. Murder carries a potential maximum sentence of life imprisonment.

Noori has been refused bail and has yet to plea to any charge.