UPDATED 7.00PM: A scene examination is taking place outside the McDonald's in Upper Hutt after a police shooting today.

 The man was shot dead by police this afternoon after firing inside the restaurant and then shooting at officers outside.

Newstalk ZB reporter Laura Dooney said a cordon remains in place in Main Street and is expected to be in place for the next few hours.

She said police have a lot of work to do, and many people to speak with.

Armed police arrived in Main Street around 12.40pm. 

Factbox: Police shootings in New Zealand

Wellington District Commander Superintendent Sam Hoyle said the man fired at police with a "high-powered rifle" when they arrived at the scene.

"[Officers] have spoken with the man involved, attempting to negotiate a peaceful resolution with him," Hoyle said. 

"After some minutes, he has been shot by police. He has then been offered medical support by both police officers and Wellington Free Ambulance staff. Unfortunately he has died at the scene."

Hoyle defended the use of firearms by saying that "given what the staff were confronted in the middle of a busy CBD...the tactical options they took were the appropriate ones."

An investigation is currently underway.

Fifteen-year-old JP saw police shoot the man, saying he was first hit in the foot "and then he started stumbling and then fell over."

"Dog came in, started chewing his leg and then he stopped moving. They started moving on his chest for a while."

Police said immediate medical attention was provided but he died a short time later. 

A staff member is inside the mall on Main Street, where staff and customers were locked inside for their safety.

They saw a man walking down the street with a rifle, and heard what sounded like gunshots, and that person running away.

Paddy was driving near the mall when armed police came running up to the car and told them to get away.

"They were everywhere, dog handlers, lots of cops with guns, all the little sidestreets were shut down. We were trying to get over the Rimutaka's and the there were police coming from that way."

People rushed into a Subway when they heard a gunman was in the street. Nikki Hearfield was working at the time:

"We had quite a few people in the shop, hunkering out there. We locked all the doors, everyone away from the windows then we saw police running up the street."

McDonald's spokeswoman Kim Bartlett said the store on Main St was "now officially a crime scene".

Bartlett said all their staff are safe and no customers have been hurt.

Support is being offered to police involved and the many witnesses to the incident.