More than 50 people were taken to hospital with injuries after the tram derailed in the Croydon area.
The tram derailed soon after 6 a.m. (1 a.m. ET) Wednesday near the Sandilands stop, east of Croydon town center, the police statement said.
Deputy Chief Constable Adrian Hanstock said officers who arrived on the scene shortly afterward "were met with a complex and challenging situation."
"This is a tragic incident and our hearts and thoughts go out to all those affected," he said.
He said the coroner confirmed at least seven people were killed in the accident. Police would continue to work throughout the night to formally identify the victims, and provide care and support for their families, he said.
"Tomorrow, we will assess how and when it is appropriate to recover the tram and remove it from the tracks," he said.
Croydon is a large town in south London that is home to around 38,000 people.
Resident Hannah Collier tweeted that she "heard a massive crash" outside her window and could see "emergency services everywhere."
She later tweeted: "This is horrific, I can't believe people have lost their lives, my condolences to all those affected."
The London Ambulance Service said it sent 22 ambulance crews to the scene and taken 51 people to two London hospitals for treatment.
"We have treated a number of patients at the scene, mainly for minor injuries such as cuts and bruises, however very sadly some people have died and others have suffered serious injuries," said Peter McKenna, deputy director of operations at London Ambulance Service.
Croydon council leader Tony Newman said: "This is a sad day for Croydon and our thoughts are with everybody affected by this tragic incident and all those people who are working at the scene."
According to Transport for London, the Croydon Tramlink runs along 28 kilometers (17 miles) of track, has 39 stops and carries millions of passengers each year. It's London's only tram network.