The chased vehicle eventually stopped on Kuranui Rd before one of the occupants got out and shot at officers.
A second police car arrived and officers fired shots in return.
Three police staff then took cover in nearby farmland.
The area was cordoned off and Waikato AOS arrived shortly after to escort the officers to safety. They are uninjured.
The police Eagle helicopter has also been deployed to the area and is assisting.
A mother who lives on Kuranui Rd said she woke to gunshots being fired outside her childrens' bedroom windows.
The woman told Fairfax that when she rang police, she was told to grab the four children from their beds.
"I was told to stay low and if the kids' bedroom was by the road, we were to go and move them to a room with the least windows.
"It was practically right outside from us.
"We rung it in, unsure of what was happening, and they said on the phone we needed to lock all doors and stay low.
"Not long after that we had an officer show up on our doorstep letting us know what was happening and what we needed to do."
Police searched the woman's property and the woman has since left her home.
"They told us that they had one person but were still on the hunt for two people," she told Fairfax.
Another resident, Kaye Turner, said she woke to a helicopter going over the area for a long time from 2am.
She said from her home, about 3km from Morrinsville, she saw what looked like red flashing lights towards the town.
A reporter at the scene said windscreen of a police car parked on Kurunui Rd is littered with about 20 bullet holes while the car alleged to have held the offenders remains in a ditch.
The driver's door of the patrol car remains open, from when the officer has appeared to have fled for his life.
It has come to a stop on the wrong side of the road and fluid appears to have leaked from the vehicle which was shot at several times.
The red, late model Holden - used by the offenders - has about six bullet holes in the driver's window. The rear passenger door is and it's boot open as the vehicles remain in the middle of a police cordon on Kuranui Rd this morning.
Cordons have been relaxed so Kuranui Rd is closed between Avenue Rd South and Scott Rd, officers placed at each end.
Occupants of a Kuranui Rd house in the middle of the small cordon are trapped inside and can be seen standing outside getting a closer look at what's happened.