A police officer has been shot dead and two other officers and a civilian injured in a shooting incident.
The gunman is still currently holed up in a house surrounded by police sharp shooters.
The offender is known to police, and is believed to be in the house, alone.
The dead officer has been named as Senior Constable Len Snee from Taradale. The two injured officers have been identified as Constable Bruce Miller and Constable Grant Diver.
Police have not been able to get to Snee and he is still at the house next to his police vehicle.
The incident broke out just after 9.30am, when police were called to an address on Chaucer Rd, Hospital Hill. It is thought to have been sparked by a police drug raid on a two-storey property.
Residents say the street where the shooting took place sounded like a war zone, with around a dozen shots ringing through the air not long after children had been heading to school.
Schools in the area were locked down and people were told to stay indoors as armed offenders swarmed the area and surrounded a house. Schools will remain under lockdown until further notice.
Police say the offender has a high-powered rifle, however, they say he is well contained inside the house. A neighbour in the area told Radio New Zealand he knows the suspect and believes he has a number of weapons with him.
There was a woman at the house with the offender earlier in the day. She has been interviewed by police.
Hawke's Bay District Health Board spokeswoman Chris Lord says all three patients admitted to hospital have undergone surgery for gunshot wounds.
They are all currently in a serious condition.
The officer is the 29th to be killed in the line of duty, the two most recent deaths coming in 2008.
In July, Sergeant Derek Wootton, 52, was struck and killed as he laid road spikes ina police chase, and In September Sergeant Don Wilkinson was fatally shot while carrying out undercover duties in Mangere, Auckland.
Click here for the full list of NZ police officers killed in the line of duty.