Streets are in lockdown after police were fired at during an early morning raid in Melbourne's northwest.
Police were executing a drug warrant at a home in Levenia St, St Albans, about 6am when it is believed a handgun was fired a number of times at police.
A siege is now under way.
Police have confirmed nobody was injured and officers cordoned off the street after the shots were fired.
Police are attempting to communicate with the occupants of the home.
There are traffic delays in the area and people travelling to Victoria University's St Albans campus and nearby schools could be affected.
It is unknown how many people are in the house and 3AW reports police did not get too close to the home before shots were fired.
The siege has now entered its third hour and Channel Seven reports there have been no breakthroughs in the negotiations.
The scene is intensifying, with 30 police officers, including those from the Special Operations Group, attempting to gain access to the house.
A heavily armoured vehicle rammed the front gates of the property and now police have gained access to the front yard.
There are about a dozen police cars in the street.
Channel Seven reporters on the scene say they have heard sounds of smashing glass.
It is believed residents are being told to stay inside but are not being evacuated.
Neighbour Raj Malhotka told the Herald Sun he heard two shots.
"I was awake inside the house at the time when I head two gun shots," he said.
"My kids are still in the house getting ready for school."
The dog squad is also on scene.
Channel Seven spoke to a mum who tried to take her son to University Park Primary School, a block or two away from the siege, but they were told to go home as the school is shut down.
Police are checking neighbours' driveways and around their homes to make sure the people involved in the siege haven't left the house.
Channel Seven reports police are also looking for other ways to access the home.
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