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Police say the same man was involved in an an attack on his brother in the early hours of the morning in a Melbourne suburb.
It is believed he then went on to take a woman hostage in the car. She was released before the driver proceeded to the city centre and started to hit pedestrians.
The police say the man is known to them, and has a long history of family violence, drug issues and mental health problems.
He was also charged at the weekend in relation to an assault.
The four people who died have not been named, but police say that among them were a man and woman in their 30s, and a young child, none of whom were related to each other.
The injured baby was three months old. Also among the injured was a two-year-old who is in a serious condition, and children aged nine and 12.

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Four people, including a young child, have died after a car deliberately hit pedestrians in central Melbourne, police say.
At least 29 people were injured, among them a baby who is in a critical condition after the car hit a pram.
Police say they rammed the car, shot the driver in the arm and arrested him.
They say the incident was not terror-related, but is believed to be linked to a stabbing in the south east of Melbourne early on Friday.
The car ploughed into pedestrians in the Bourke St Mall, a busy shopping area, just before 14:00 (03:00 GMT).
Footage broadcast on local media captured moments before showed a maroon car driving in circles, with the driver leaning out of the window, in front of Flinders Street railway station.