One man died after the driver, described as a large white man, targeted people near the Finsbury Park Mosque in north London early on Monday.
Witnesses described hearing the man, who was detained by members of the public at the scene, shout: "I'm going to kill Muslims".
Metropolitan Police Deputy Assistant Commissioner Neil Basu said: "This is being treated as a terrorist attack."
Mr Basu said eight people are in hospital and two others were treated at the scene.
All of the casualties were Muslims, he added.
He said: "The attack unfolded whilst a man was receiving first aid from the public at the scene; sadly, he has died.
"Any causative link between his death and the attack will form part of our investigation.
"It is too early to state if his death was as a result of the attack."
The attacker struck as the area was busy with worshippers attending Ramadan night prayers at the mosque.
One witness described being surrounded by bodies in the wake of the attack outside the nearby Muslim Welfare House.
Another witness, who wanted to be identified as Abdulrahman, which is not his real name, told the Press Association: "I managed to get the driver of the van.
"He wanted to run away and was saying 'I want to kill Muslims'.
"So he came back to the main road and I managed to get him to the ground and me and some other guys managed to hold him until the police arrived, for about 20 minutes I think, until the police arrived."
Abdulrahman claimed the driver said 'Kill me', as he was being held on the ground.
Mr Basu thanked members of the public who detained the driver, saying "their restraint in the circumstances was commendable".
The driver has been arrested on suspicion of attempted murder.
Mr Basu added: "Given the methodology and given what was occurring, what's happened, the tragic incidents across the country, this had all the hallmarks of a terrorist incident.
"That is why the counter-terrorism command were called out to investigate."
Video posted online of the aftermath of Monday's attack showed a scene of chaos as people tried to help the injured.
One man could been seen giving CPR to a victim in the street, while another man's head injury was treated with a makeshift dressing.
People could be heard shouting and screaming amid the chaos, and bloodstains were visible on the pavement.
In one video, a group of men are seen holding the suspect on the ground as they call for the police.
Prime Minister Theresa May will chair a meeting of the Government's Cobra emergencies committee to discuss the Seven Sisters attack at 10am, and is expected to give a statement outside 10 Downing Street afterwards.
The Secretary of State for Wales said South Wales Police was working with officers from London on the investigation.
Images of the van showed it was rented from Pontyclun Van Hire in Pontyclun, near Cardiff.
MP Alun Cairns said: "I have this morning spoken to the Chief Constable of South Wales Police, Mr Peter Vaughan.
"He has assured me that his team is fully engaged and working in partnership with the London Metropolitan Police as the investigation into the abhorrent attack at Finsbury Park gets under way."
Mr Cairns added that it was "crucial" that the authorities were given time and the space to conduct these important enquires and that his "thoughts and prayers" were with those affected.
Communities and Local Government Secretary Sajid Javid spoke briefly to concerned residents before being led through the police cordon as he visited the scene.
Flowers have been laid near Finsbury Park Mosque, while police officers have also arranged bouquets from members of the public inside the cordon.