Armed officers and the police Eagle helicopter are currently hunting for a fleeing driver on the outskirts of Taupō.
A police spokeswoman said the incident began about 1pm after officers attempted to stop a Black Hyundai in Wharewaka, south of the city.
However, the driver fled north on State Highway 1 before turning onto the Napier-Taupō Rd (SH5) where armed offenders squad members and other staff are currently concentrating.
Police attempted to stop the vehicle as the driver was believed to be wanted by police.
The incident has sparked interest from locals on social media, one claiming the driver had already rammed a patrol car.