Ten people have been killed in a shooting rampage at a Munich shopping centre.

Police warned of an “acute terror” situation in the southern German city, which saw panicked shoppers fleeing the mall as armed police roamed the streets on the hunt for the attacker.

Earlier, police had said they were looking for up to three suspects, citing eyewitness accounts.

A Munich police spokesman said it was now believed likely that only one man was responsible for the shooting.

Police said one body had been found about 1 kilometre from the scene and they believed it was the gunman.

A further 10 people were injured, police said.

“We suspect terrorism,” a Munich police spokesman said.

People are evacuated from the mall as police search for the gunman. Photo: Getty

Munich police received a call at 5.52pm local time about the shooting and the news spread quickly via social media.

The blood bath is believed to have started at a McDonald’s with multiple shots fired on Hanauer Street before the attacker moved to the Olympia Einkaufszentrum shopping centre in the south German city at about 6pm.

An ‘acute state of terror’

The shooting spree touched off panic and fear in the city of 1.4 million inhabitants.

Munich authorities spoke of an “acute state of terror”.

Shoppers being moved from the mall following the shooting. Photo: AAP.

In the city centre, people sought shelter in office buildings and restaurants.

A young woman sat down on the stone steps of an office building.

“I don’t want to die,” she sobbed. “You are safe here,” another woman said, trying to soothe her.

About 20 to 30 people fled into the basement of the Il Sogno restaurant.

Others screamed as they ran into the kitchen of a McDonald’s outlet on Karlsplatz. A member of staff quickly blocked all the doors.

The McDonald’s management had advised him on the phone to keep the restaurant shut, the man said, adding that the mood among the patrons was calm.

“We’re giving them drinks and food,” he said.

People on Twitter offered safe places to passers-by via the hashtag Offenetr (open door).

Meanwhile, the pedestrian area in the centre leading from Karlsplatz to the main central square, Marienplatz, was deserted. Fear kept people away.

Shopkeepers in the city centre pulled down their shutters well before closing time. Some left bins of items on special offer outside.

Helicopters flew over the city, the noise of police sirens wailed in the streets and cars were stuck in traffic.

Underground rail, trams and bus services were suspended. The main train station was evacuated and all trains were diverted.

The station foyer emptied quickly, as police with machine guns guarded entry and exit points.

People ran across the tracks to get home. Heavily armed police officers were stationed everywhere around the transportation hub.

Georgia Guggenmoos had been at a beer festival in Munich and wanted to take the train home to Murnau with her husband.

“We are shocked, we had such a peaceful day,” the 51-year-old said.

An Italian tourist in the city centre asked a local where she might be safe.

Emergency services react to reports that three gunmen were on the run. Photo: AAP

“It’s best for you to go to a restaurant,” he responded. The important thing is to get off the street. wa

Police implemented a state of emergency in the city’s northeast near the Olympia shopping centre where the shooting took place.

Police evacuated the mall and cordoned off the area around it. They urged people to stay at home.

“Of course it’s normal to worry. I’m feeling pretty queasy,” said an assistant in a pet shop about two kilometres away from the shopping centre.

She was worried about her family too, “especially since I haven’t been able to get hold of my brother and sister. Maybe they went shopping there.”

She wasn’t sure if she would get home that night.

“I live close by, only five minutes by car. I hope the roads will be clear.”

Not far away, in a side street, five people squeezed into a small car. They were work colleagues who had just finished their shift in a supermarket.

“There aren’t any underground trains running, and we all have to get home somehow,” said the young woman behind the steering wheel who was giving her colleagues a lift.

Australian government raises travel warning

The advice level for Germany remains normal, but Australians have been told to exercise a high degree of caution in Munich and pay close attention to their personal safety.

Travellers have been advised to follow advice from local authorities and avoid public places in the Bavarian city.

A Department of Foreign Affairs and Trade spokesman says Australian officials in Germany are making urgent inquiries into whether any Aussies have been victims of the attack.