UPDATED 8.48pm: Bay of Plenty District Commander Superintendent Andy McGregor said the man shot in Rotorua is in a critical condition.

LISTEN: Rotorua Daily Post chief reporter Stephanie Worsop spoke to Larry Williams

The 35-year-old man was airlifted to Waikato Hospital by the Waikato Westpace Rescue Helicopter around six o'clock. 

An address has since been cordoned off and will be the subject of a search examination tomorrow.

McGregor said the man is known to the police and lived locally and was believed to be under the influence of “a substance”, possibly methamphetamine.

Police used a taser on him three times, but it was unsuccessful in subduing him.

McGregor said the man was also pepper sprayed and he was shot twice.

He said the incident unfolded when a police officer was driving along Vaughan Rd and “felt a thump” on the side of his car.

“As he has pulled over and got out of his vehicle, he noticed a man acting suspiciously. The officer went to speak to the man and noticed him holding a four-foot long slasher.  The officer has moved back to the police car at which time the man has attacked it.”

He said the man was followed to Marino Rd where he was approached by armed police staff at a commercial premises, believed to be Birchall and Maunder Automotive.

“After multiple requests asking the man to drop his weapon, police sprayed the man with OC spray. This had no effect.

“Staff have then deployed a taser three times in an effort to incapacitate the man with each attempt being unsuccessful.”

The man then walked towards Te Ngae Rd, still armed with the slasher.

“Following further warnings by police, an armed officer has then shot the man twice. Based on the information we know at this time, Police believe the man was affected by a substance, possibly methamphetamine.”

Police have notified the Independent Police Conduct Authority of the incident and were asking witnesses to come forward.

He said the officer who shot the man was “very upset” and he did not agree with claims that the man was shot “too soon”.

A St John ambulance spokesman said the man was in a status two, or serious, condition and transported to Rotorua Hospital.

It is understood that the man ran through local businesses on Vaughan Rd and was carrying a machete.

Witnesses told NZME he used the machete to smash a police car.

The shooting happened near the roundabout at the intersection of Marino Rd and Tarawera Rd, according to witnesses.

A Rotorua Daily Post reporter at the scene says two ambulances arrived and a man was taken away in one of them.

The reporter says there were about 15 police officers and the man was lying on the ground being treated by police before the ambulance arrived.

She said the person didn't seem to be moving, and traffic is at a stand still and backing up fast.

In a statement at 1.40pm, police said that the man was shot by police “at an address” on the street.

Cordons have been put in place between Vaughan and Allen Mills Rds.

In a media release at 2.45pm, police said traffic was now being let through the scene, but motorists should still expect delays.

The statement confirmed that the man had been given first aid and taken to hospital.

“As this is an evolving situation, police will release further information as it becomes available,” said the statement.

There were about eight police cars in the area with officers directing the traffic around the roundabout.

The reporter said a police officer was being comforted at the scene after the shooting.

Workers at the nearby Goughs workshop saw the incident unfold, said group chief executive Karl Smith.

“Some of our workers observed the fracas…we have an open workshop so they were looking out and saw it.”

He said the incident was on or near the roundabout.

“The person didn’t come through our premises but there was a fair bit of ruckus.”

The staff were shaken and Mr Smith said he expected they would give statements to police.

A local worker, Cerese Ashby, 20, said she was going to get lunch when she saw the man get shot.

“I saw a guy running down the road, he was armed with something but I couldn’t tell what. I thought it was a gun at first but it just looked like a big weapon. He was running down the road by the roundabout and the police wer chasing him.

“They were yelling at him to get on the ground, they yelled twice but he didn’t so then two massive gunshots went off and the guy hit the ground.

“The paramedics went over to him and police went over to him.”

Today’s shooting comes after police shot and killed Nick Marshall, 36, in Hamilton on Tuesday night.

Marshall was shot by police after they searched a possible gang pad for methamphetamine.

Police say the man picked up a long-barrelled firearm and cocked it "in very close proximity" to officers at about 6.45pm on Grasslands Place, Frankton.

Officers fired several shots and the man was pronounced dead at the scene, despite first aid attempts.

If you saw today’s incident or have any other information about what unfolded please contact Rotorua Police on 07 346 2968 or the anonymous Crimestopper tipline on 0800 555 111