A 63-year-old man has been charged with three counts of murder following a four-hour siege in Wedderburn, central Victoria on Wednesday night.

Police were called to a home at Mulga Ridge Road at Wedderburn, around 8:20pm (AEDT) following what police described as a “minor neighbourhood dispute”.

Officers found one person dead and heard gunshots nearby so they withdrew from the scene.

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They spoke to a man by telephone for about four hours before the man surrendered.

A search of the area revealed two other bodies.

All victims were from the same family and identified as Peter and Mary Lockhart, aged in their 70s, and Ms Lockhart’s son, Greg Holmes, 48.

They were well known in the local area.

Earlier, Detective Superintendent Peter De Santo said a dispute had escalated out of the blue.

“There is some history of minor disputes in the past and when I say minor, at the very bottom end of disputes between neighbours,” he told reporters.

“It’s just very hard to fathom how this has all unfolded.”

Police found the son’s body in a paddock at a property near a small settlement named Logan, south of Wedderburn.

The officers then heard gunshots from a property across the road, and retreated and cordoned off the area.

They communicated with the alleged offender on the phone and he surrendered peacefully around midnight.

A second body was found in a driveway and the third at the rear entrance to the home.

Det Supt De Santo said there was no history of violence, major disputes or assaults between the neighbours.

Mr Lockhart was well known in the community. He was president of the Wedderburn Historical Engine and Machinery Society for several years until a couple of months ago.

Loddon Shire mayor Gavan Holt said everyone involved was well known in the community.

“I’m being told that this was a long-running neighbourhood dispute over matters occurring on land which has escalated far beyond where it should have gone,” he said.

Det Supt De Santo said the arrested man had several registered firearms that were recently inspected by police and were found to comply with regulations.

Logan resident Rosie Camilleri said it was a big shock.

“It’s a pretty quiet town here. Everyone gets along pretty well. It must’ve been something that was brewing for a while.”

– with AAP