An Australian woman has told of her terror as shots rang out just metres away as a deadly gun attack unfolded in New Zealand’s largest city.

Erin Sokolowsky, who lives in Auckland, was waiting at traffic lights near the Commercial Bay shopping precinct in the city’s busy downtown area early on Thursday when she heard gunfire, sending people running “left, right, and centre”.

“[It was] really loud and felt really close, and we couldn’t hear or see where it was coming from,” she told Nine’s Today.

“The best thing we could do is run and hide behind a wall, and hightail it out of there.”

Ms Sokolowsky said the first thing she did was text her friends and family.

“The shots sounded so close I wanted to make sure everyone was OK,” she said.

Three people are dead, including the gunman, and six others were injured in the shooting.

It began with reports of a gunman at a construction site in Queen Street, in Auckland’s CBD, about 7.20am (local time). Armed officers and helicopters swooped on the area and streets were cordoned off amid initial reports that two people had been injured.

Ferry services that operate from a nearby terminal were cancelled.

Up to 100 tradespeople in the building were reportedly told to head to the roof to take cover. Media showed footage of them hiding behind packs of pre-mix cement, under police supervision.

Police later confirmed that two people, both civilians, and the gunman had died. An officer was also reportedly among those hurt.

“Police have contained a serious incident that unfolded at a construction site in Auckland’s CBD this morning,” NZ Police tweeted.

“Multiple injuries have been reported and at this stage we can confirm two people have died. The male offender is also deceased.”

Tweet from @Worldsource24

Local media reported the gunman was a 24-year-old man who worked at the building.

He arrived on Thursday with a pump-action shotgun. Colleagues thought he was carrying out a joke until he opened fire.

Police said the man moved through the building, shooting all the while.

“Upon reaching the upper levels of the building, [he] has contained himself within the elevator shaft and our staff have attempted to engage with him,” they said.

“Further shots were fired from the male and he was located deceased a short time later.

“Details around what has exactly occurred are still emerging and police will continue to provide updates around injuries and the circumstances.”

Police said the incident is not being treated as a national security risk. They are expected to provide further updates later on Thursday.

New Zealand Prime Minister Chris Hipkins said had “deep sorrow” for the two victims, who he understood were civilians and not police.

“I want to thank the brave men and women of the New Zealand police who ran into the gunfire, straight into harm’s way in order to save the lives of others,” he said.

“These kind of situations move fast and the actions of those who risked their lives are nothing short of heroic.”

Thursday’s deadly incident came as Auckland prepared to host the opening game of the Women’s World Cup later on Thursday.

The FIFA Fan Festival base is near where the shooting occurred. Former NZ international Maia Jackson told the NZ Herald she was nearby.

“It’s pretty scary actually. So they pushed us to the back of the [building], where we are, and we’re just trying to keep sane,” she said.

“There’s lots of security and lots of uncertainty.”

Several of the international teams, including the US and Norway, are staying in hotels in the area.

New Zealand plays Norway in the World Cup opening match at Eden Park, five kilometres south of where Thursday’s shooting unfolded, on Thursday night.

-with AAP