Police are piecing together why a distressed man wound up in a stand-off with officers that led to him being fatally shot on a Melbourne freeway.

The knife-wielding man was shot dead by police following a stand-off on the Monash Freeway.

Police were called to the on-ramp of the freeway at the EastLink interchange at Dandenong North about 9.30am on Thursday following reports of a distressed man parked in the emergency lane.

Upon arrival, they tried to negotiate with the 53-year-old and calm him down before he produce a knife and advanced on them.

The officers fired a non-lethal beanbag round to try to stop the man before shooting him twice in the chest with a semiautomatic firearm.

The Narre Warren man died at the scene.

Assistant Commissioner Robert Hill said officers were trying to negotiate with the 53-year-old when he produced a knife.

“There was certainly some agitation on behalf of the male,” he said at the scene.

“We tried to actually calm the male down.

“At a point during that course of negotiation, the male has produced a knife and advanced on the police members.”

Police first fired a non-lethal beanbag round at the man, before he was shot twice in the chest

The man, identified as a resident of Narre Warren, in Melbourne’s south-east, died at the scene.

“Our police members did everything they could to resolve this matter, but unfortunately, it has ended sadly with someone losing their life,” Mr Hill said.

“It is a sad occasion certainly for the family, the loved ones, the friends of this deceased male. It’s a sad occasion for the community of Victoria, the local community here, and certainly a tragic event for our police now to deal with.”

The assistant commissioner said the man was apparently suffering a “mental health episode” at the time.

Emergency vehicles clustered around the scene of the standoff. Photo: ABC

Police say the incident would have been seen by many passing motorists. Images from body-worn and freeway cameras will be used in the investigation, but they are also appealing for dashcam footage from passing vehicles.

The officers involved had been separated and taken to nearby police stations where they would be drug tested and interviewed, Mr Hill said.

Earlier, Mount Eliza man Ben told ABC radio he witnessed a “stand-off” between dozens of police and a man.

“They had guns drawn on the assailant,” he said.

“I don’t know if it was a pursuit and they’ve pulled him up over there, or why he was in that position.”

Another witness, Terry Leehain, whose truck was about five cars back from the scene, said a VicRoads vehicle was already parked behind the man’s car when police arrived.

“We didn’t know what was going on but they were talking to a gentleman. Everything was fine,” he told the ABC. “It went for about five minutes and he was a little bit agitated. He was moving around.”

Mr Leehain said he didn’t see what happened when the man was shot.

“There were four shots,” he said.

He said the incident lasted 10 to 15 minutes.

For much of Thursday afternoon, city-bound lanes of the Monash Freeway remained closed, with the state Department of Transport urging motorists to exit the freeway as soon as they could.

The road was reopened by 4.30pm.

Homicide detectives will investigate the shooting, with oversight from Professional Standards Command, as is standard procedure..

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-with AAP