Police are believed to have arrested a man thought to be armed with a crossbow at an address in Victoria Street, Seddon, 7km west of Melbourne's CBD.
There was a suspected stabbing in the area beforehand.
Several heavily armed police officers are present at the scene, along with a police helicopter circling overhead.
The street was locked down as talks with the suspect took place.
The man was believed to be the only person inside the property.
Police are encouraging people to avoid the area, but said there is no ongoing risk to the community.
'Never seen anything like it. Police everywhere, half of Victoria St is taped off,' one person wrote on X.
More to come...
Police are negotiating with a man at an address in Victoria Street, Seddon (pictured), 7km west of Melbourne's CBD
Several heavily armed police officers are present at the scene, along with a police helicopter circling overhead
The street was locked down as talks with the suspect took place. Police officers are pictured
Police officers are pictured at the scene of the siege in the Melbourne suburb of Seddon