Police from Taupō and Bay of Plenty asked members of the public to avoid the area as they responded to the incident in the suburb of Hilltop.
Tauhara College, Tauhara Primary School and Lake Taupō Christian School advised parents via their Facebook pages, just after 2.30pm, not to come to school to pick up children.
On Thursday evening, police said they had identified the person involved in the incident but he remains at large.
“You know who you are, your family knows who you are, and we know who you are so let’s get this squared away,” said Taupō area commander Inspector Phil Edwards.
“It’s time to front-up as this isn’t going away, so it’s best you come and see us at the Taupō Police Station sooner rather than later.”
After identifying the man and establishing there was no wider risk to the community, police lifted the lockdown at five schools and a kindergarten about 5pm. Schools would reopen as usual on Friday.
“We know this has been incredibly unsettling for some people, and I want to thank the community, the schools and the whānau who have been affected by this,” Edwards said.
Inquiries would be made with associates, friends and family of the man in efforts to locate him, police said.
Anyone with information on the man’s whereabouts is asked to call police on 111, referencing event number P057866209.
Police have yet to confirm the nature of the incident.
Police were earlier driving around the streets near the scene of the incident alerting residents with a loud speaker to “stay indoors”.
There was also heavy traffic outside the cordons to the schools, with hundreds of parents parked on the side of the road and milling outside very frustrated at the lack of information.
“Tauhara College has gone into lockdown. The police have asked the school be put into lockdown because of an incident in the area. We will continue to provide updates on our Facebook as often as possible. Please do not come to the school or phone the school as you will not be attended to and this may cause disruption to the management of this incident and could potentially place yourselves and/or our staff and student’s safety at risk. All further updates will be provided on our Facebook,” an earlier post said.
A parent, waiting for her son at Tauhara Primary School, said there had been a helicopter circling the area and lots of police cars.
She said armed police officers had stopped a vehicle on Crown Rd near Tauhara Primary School and appeared to be detaining someone in the middle of the road.
A woman who saw police detain someone said they released him soon afterwards. Cordons have blocked off Invergarry Rd, and there are road spikes out.
Police said they were asking members of the public to avoid the Hilltop area as they “respond to an incident”.
“Cordons are in place on multiple streets in the area, and schools have been placed into lockdown as a precaution,” the spokesperson said at 3.30pm.
“More information will be released when we are in a position to do so.”
A message on the Lake Taupō Christian School Facebook page told parents not to be alarmed.
“Do not be alarmed, we are all safe. We are under police guidance and ask parents not to come to school until we are given the all-clear. We will give any updates and the all-clear via our school app. Please download the Skool Loop app and select Lake Taupō Christian School.”