Police have arrested a man in an armed standoff at a Hastings flat complex following the earlier robbery of a bar.

The man walked from the Karamu Rd flat complex escorted by police, hugged family members and was allowed to smoke a cigarette held for him by a family member as he was handcuffed, before being taken into custody.

It's understood other alleged offenders are still holed-up in the complex in a tense standoff that began about midday.

Fire crews were also on scene and it's believed a special drone has been sent up to surveil the scene.

The stand-off sent nearby schools into lockdown - yet many children had since been released back to their parents waiting at the police cordon.

Parents at the front gate of Hastings Central School crowded a side gate on Southampton Street as they awaited the arrival of their children.

One parent has been waiting since 1pm this afternoon and has three children inside.

A teacher was heard comforting parents: "They're all good. They're OK".

Children are coming out class by class.

Police had earlier warned a growing group of bystanders to move on: "If this guy has got what we think he has got you guys wouldn't even be safe here," the officer warned.

One bystander said her grandchildren were in the locked-down Hastings Central School and she feels for other parents. Another said he was "worried as I can't get in to get my kids".

Hawke's Bay Today understands the man had been pursued by police and fled from a vehicle near Hastings' Boys High School just after midday.

The school had since been put in lockdown and earlier reports suggest the offenders could be armed.

Six patrol cars were also on scene with a "big crowd" watching.

It is understood offenders earlier stormed the King St bar and demanded money about midday.

A woman who went into the bar during the incident said the man was demanding money and it was a "freaky experience".

She did not wish to be named but said she heard a woman screaming as the man was forcing her into the back room to get money.

It's not known if a weapon was presented.

More to come.