"We do believe he was trying to hand himself in," Kershaw said.
The NT Police Commissioner confirmed the 45-year-old man, described as Caucasian and wearing high-vis workwear, had been in jail for more than a year before he was released on parole in January.
Police are also investigating the man's alleged links to local outlaw motorcycle gangs.
"Unfortunately and sadly four people have lost their lives this evening," Kershaw said.
Around 100 police are placed around the city to ensure public safety and the suspect is in custody in hospital.
NT Police Duty Superintendent Lee Morgan told news.com.au police were still working to confirm the exact number of injuries and deaths due to crime scenes being scattered across the city.
"We're still working through a number of crime scenes so we still don't know if there are others," he said.
The first calls to police came after shots were heard on Finniss St in Darwin.
The man then jumped in his ute and drove a block away to the Palms Motel on McMinn St where he allegedly killed one person.
Witnesses reported hearing up to 20 shots fired at the motel, telling horrifying stories of the man allegedly calmly walking through the motel "looking for somebody".
"He shot up all the rooms and he went to every room looking for somebody and he shot them all up, then we saw him rush out, jump into his Toyota pick-up, and rush off," witness John Rose told the ABC.
The man then allegedly fled the motel scene down to an apartment complex on Garden Hills Crescent in The Gardens, where another person is believed to have been killed.
"We're still putting together the chronology of events," Kershaw said.
A witness told the ABC police initially drove straight past the man.
"We looked through the window and there was a guy with a gun. We put [our car] in reverse and went straight back. As we were going around the block, we saw him walking calmly through the unit blocks. The cops came around, went straight past him because they didn't know who he was, he was that calm," the Darwin local said.
"He put his gun in the boot [of his ute] then reversed out. The cops followed him and they took off down the street and then we just heard gunshots again."
It's understood the other two men were killed at The Buff Club in Stuart Park and Jolly St in Woolner.
After being on the run for more than an hour, the man was tackled at a city roundabout by heavily-armed tactical response group police dressed in camouflage gear.
Video taken at the scene shows the man, covered in blood and no longer wearing a shirt, lying on his back as he tried to kick the rifle of one of the police officers.
The man was tasered at the scene before being taken away in a police vehicle.
Police said there were at least five different crime scenes they would spend the night working through.
The main crime scene is The Palms Motel on McMinn St in Darwin. Officers have also cordoned off Garden Hills Cres, a Coles Express petrol station on Daly St, Jolly St in Woolner, The Buff Club in Stuart Park and finally the roundabout where the 45-year-old was arrested.
Another crime scene has been declared at the Peter McAulay Centre — the central complex for policing in Darwin — after the man allegedly tried to gain entry to the building.
Kershaw said police had received reports the man had allegedly fought with someone at the Buff Club, ending in a knife and gun being drawn.
"Our investigation will be evidence-based and intelligence-informed," Kershaw said.
Kershaw praised the actions of police — who managed to have the alleged gunman in the back of a paddy wagon within the hour.
"This was a first class response. Within the hour, we were able to apprehend and take that offender safely into custody," he said.
Kershaw said the man allegedly still had his shotgun when the tactical response group arrested him.
Morgan said police believe the shooter acted alone. He was driving a white Toyota Hilux ute and was described as 195cm tall.
NT Chief Minister Michael Gunner told reporters: "This is not the Darwin we know".
"I understand when an event like this occurs, people's fears turn to terrorism. I can confirm we do not believe this is not a terrorism incident," he said.
"This may be an event you prepare for but this is never an event you want to respond to. It is an incredibly difficult night. Territorians can be proud of those who serve us on our frontline."
NT police are still urging people to stay inside and said it was an active police operation.
Witness Leah Potter told the ABC she helped an injured woman after the alleged shooter fired his shotgun through a motel room door.
Potter told the publication she heard something that sounded like fireworks near the Palms Motel in Darwin before seeing the woman carried outside.
Her legs were bleeding and peppered with shotgun pellets.
A man, believed to be the injured woman's boyfriend, dropped her on the road to go and get help from police.
"A man came running with a woman in his arms from next door which is the Palms Motel, which is the motel next to my motel, and he just dropped her on the footpath right in front of us," Potter said.
"I ran and got some towels and wrapped up her legs, she had little holes all in her skin on both her legs and she was bleeding everywhere."
Large sections of the city were closed down earlier yesterday as police worked to find the man.
Police armed with assault rifles and wearing camouflage gear cordoned off roundabouts and roads in Darwin.
Speaking from the Australia-UK Chamber of Commerce in London, Prime Minister Scott Morrison said his thoughts were with the Territory.
"It's a terrible act of violence that has already taken lives," Morrison said.
"Particularly, I want to extend my deepest condolences and sympathies to all the people of the Territory and particularly in Darwin. This is a very tight community and I know they will be rocked by these events.
"Our advice is that this is not a terrorist act, nothing to suggest this was the case whatsoever. The true motivations of this criminal and violent act will become better known...but in the meantime I think it is important that everyone in Darwin, in the Territory, understands that the thoughts of Australians, wherever they are, will be thinking very much of their fellow Australians in the Territory."
