Parents picking up their children from school in the tiny Bay of Plenty town of Thornton were told they were under lockdown in the library.
The Armed Offenders Squad is assisting Bay of Plenty police following reports of a man with a firearm in Thornton near Whakatāne.
A Rotorua Daily Post reporter at the cordon at the intersection of Thornton Rd and West Bank Rd saw armed police walking a handcuffed shirtless man to a police truck.
Thornton School was temporarily put in lockdown but the children have since been able to leave, a police spokesman said.
There have been no injuries, police say.