Armed police have escorted a man from a property and into the back of a police vehicle following the lockdown of Kawerau in the Bay of Plenty.

A shirtless man, who appeared to be handcuffed, was taken from the scene in a marked police vehicle with the cordon being removed and police starting to leave.

Kawerau was placed in lockdown as armed police hunted for a gunman who began "randomly" firing shots during an earlier vehicle pursuit.

Several roads leading into the Bay of Plenty town were cordoned off and the public urged to stay away. A high school was also placed in lockdown.

It followed an earlier lengthy high-speed pursuit by police of a vehicle, with the gunman believed to have dumped the vehicle in Dommet St.

A witness at the scene said she and her workmates heard the police sirens and when they went out to have a look they saw a vehicle fly around the corner, through the car park and almost hit her car in Onslow St.

"He came speeding through, rammed a police car right in front of all our shops. He looked like he was doing about 80km/h.

"He nearly ran over elderly people, one man on a mobility scooter was in shock. I had to help him get back."

The witness said it was upsetting to see someone putting other lives at risk.

"It's the worst thing I've ever seen here, he nearly ran that man over. People were on the footpath and a lady was holding her baby - she was looking down at us and he just flew out from behind her.

"He'd go back out, around River Rd, and then come back in the carpark. I was screaming at everyone get back, get your kids back. I was worried about the schools because if anyone was on the pedestrian crossing he just wouldn't have stopped."

Earlier during the pursuit, a witness said the driver had got out of their car in the middle of the road, and fired shots "randomly".

She said she was too frightened to look out the window when she heard one of the shots hit something metal and she stayed low.

People were outside and ducked behind cars when they started shooting, she said.

"The next minute, that person hopped in their car and shot off over the bridge and the cops followed them that way."

Armed police are searching for the gunman after shots were fired during a vehicle pursuit. (Photo / Supplied)

Kawerau has been placed into lockdown as the hunt for the gunman continues. No one can currently enter or exit the area.

It's believed the earlier pursuit stretched from as far as Awakeri through to Onepu and Kawerau, which is now cordoned off at each end of the town, including at Liverpool Street, River Road and Tamarangi Drive.

A video filmed by a witness captured the earlier high-speed pursuit in River Rd, Kawerau featuring one marked police car.

A police media spokeswoman has confirmed officers are responding to a firearms incident in Kawerau and have ask people to avoid travelling around the town area at this time.

Another person said the road leading into Kawerau by the bridge had been cordoned off and armed police could be seen in the area.

Tarawera High School has been placed in lockdown at the request of police for the safety of staff and students, a post on the school's Facebook page said.

Parents have been advised to stay at home as they will be unable to enter the police cordon.

Video filmed by a witness in River Rd, Kawerau shows this car being pursed at high speed by a marked police car. (Image / Supplied)

Kawerau woman Joanne Ta'ala has two grandchildren at Tarawera High School and three at Kawerau South School and said she felt comfort in knowing her children and staff at their school's were safe.

"We have a wonderful community here and I know the police out there looking after us all at the moment.

"Poor little old Kawerau gets a bum deal sometimes but we are a close community and really do look out for each other."

A man near the corner of Spencer Rd and Tamarangi Drive said police were parked on Tamarangi Drive near Tarawera River.

"I saw four cop cars within the space of a minute drive past, and they were going fast, driving into town," he said.

One of his staff was in town and was unable to go back to work as people were being stopped, he said.

Another witness, a customer at the Te Teko Superette, 11km from Kawerau, said he heard "four gun shots at least" as police chased a vehicle.

"It was scary for some, but others went out to look see what was happening even though there were gunshots."

The customer stayed indoors.

He said it was a mix of marked and unmarked police cars chasing the vehicle.