Police have shot a man armed with a knife near a busy shopping centre at Hornsby on Sydney's upper north shore, while three other people have been injured.
ABC understands the armed man lunged at officers and was shot.
Police said three other people were injured and were treated by paramedics and taken to hospital.
New South Wales ambulance service said the incident happened on Florence Street just before midday, where witnesses have described hearing gun shots ring out.
Police are urging people to avoid Florence and Lynda Streets and the Pacific Highway in the area.
A staff member at a cafe near the scene, Magdy Abdalla, said he heard fighting and shots fired.
"I just heard some people, they were shouting together or they [were] fighting," he said.
"I heard the shooting, like three or two times.
"After that I walked outside and I found three old ladies, they were injured and bleeding, and then, I found another guy, a young guy, he's bleeding as well."
He said police had closed the area to the public, but had not provided any information.
"They told our customers, after you finish your lunch or coffee, just to go straight away - walk out."