A police operation has been launched in Sydney's inner west with several streets cordoned off.
Riot squad officers, officers in bulletproof vests and the PolAir helicopter have responded to the incident near Williams Parade in Dulwich Hill.
A witness has told the ABC that a number of ambulances arrived at the scene and another said nearby residents had been told to stay indoors.
A NSW Police spokesperson said there were no reports of injuries.
Light rail services have been cancelled between Dulwich Hill and Lilyfield.