The incident happened at the offices of Work and Income office just after 10am, and the man then fled the office on a bike. Police immediately massed in the centre, and then issued an alert for Russell John Tully.
Watch Canterbury District Commander, Superintendent Gary Knowles address the media at midday
Greg Baker, who works at the nearby Moore Street Medical Centre, said he saw a man on a bike leave wearing a balaclava.
Ashburton resident Daniel Suckling said he heard a person on the street yelling at a man on a bike.
Mr Suckling said he did not hear any shots but saw the events that followed.
"Anyway, this fellow got his bike untied and was on his bike. This guy that was yelling abuse at him from the other side of the road started running across the road towards him."
"The man on the bike jumped on the bike and headed off as fast as he could, with the guy in hot pursuit."
Police cars remained outside the Work and Income office but ambulances had left the scene, Mr Suckling said.
Ashburton Guardian editor Stu Oldham said armed police were massing at an area about four or five blocks from the scene of the shooting immediately afterwards.
Mr Oldham said he understood the person was well-known to staff at the Work and Income office.