The suspect, identified by the FBI as Shamsud-Din Jabbar, a US citizen from Texas, died at the scene in the shootout with police, officials said.
A flag from the so-called Islamic State group was found in the vehicle, the Federal Bureau of Investigation said in a statement.
Witnesses say a white pick-up truck slammed through a barricade at high speed and hit pedestrians. (AP PHOTO)
Investigators found weapons and a potential explosive device in the vehicle, and other potential explosive devices were found in the French Quarter, the FBI said.
It said the vehicle appeared to have been rented.
One city leader described the assailant as being in full military gear.
"This man was trying to run over as many people as he could," police chief Anne Kirkpatrick said at a press conference on Wednesday.
"He was hell-bent on creating the carnage and the damage that he did."
The incident occurred at 3.15am near the intersection of Canal and Bourbon Streets, a historical tourist destination in the city's French Quarter known for attracting large crowds with its music and bars.
Kirkpatrick said the driver, who swerved around barricades, shot and wounded two police officers from the vehicle after it crashed.
The officers were in stable condition, she added.
Police chief Anne Kirkpatrick says a suspect was "trying to run over as many people as he could". (AP PHOTO)
"We know the perpetrator has been killed," New Orleans City councilman Oliver Thomas said.
"As we search for a motive, remember there is no making sense of evil."
New Orleans Mayor LaToya Cantrell called the incident a terrorist attack.
"This is a fluid situation and we are in co-ordination with numerous local and federal law enforcement agencies to ensure a complete and thorough investigation to bring those who may have been part of this incident to justice," Louisiana Governor Jeff Landry said on X.
A couple told CBS News that they heard crashing noises coming from down the street and then saw a white truck slam through a barricade "at a high rate of speed".
Zion Parsons, 18, told NOLA.com that he and his two friends were leaving a Bourbon Street eatery when they heard a commotion and saw a white car barrelling toward them.
He said he dodged the vehicle but one of his friends was struck, with her leg "twisted and contorted above and around her back".
Authorities say a driver fired at police and struck two police officers after his truck crashed. (AP PHOTO)
"You can just look and see bodies, just bodies of people, just bleeding, broken bones," he said.
Last month in Germany, a 50-year-old man was charged with multiple counts of murder and attempted murder after police said he ploughed a car through crowds at a Christmas market in Magdeburg, killing five people and injuring scores.
US President Joe Biden called the city's mayor to offer full federal support, the White House said in a statement.
Biden said the FBI was investigating the "horrific incident" as "an act of terrorism" and that he has directed his team to ensure every resource is available as authorities work to "get to the bottom of what happened as quickly as possible".
President-elect Donald Trump said his incoming administration would help New Orleans as it investigates and recovers from what he called an act of pure evil.
with Reuters
