An armed man has been shot dead by police after a ‘standoff’ on a busy Melbourne freeway.

All city-bound lanes of Monash Freeway were closed at Heatherton Road near EastLink, at Dandenong North, shortly after 10am on Thursday.

Aerial footage from the scene showed a body on the road and multiple police vehicles and paramedics present, with a section of the freeway taped off.

Shortly after midday, the ABC reported the freeway had been closed after an armed man had been shot and killed by police.

The ABC said a truck driver who had stopped at a roadblock saw police negotiating with a man with a weapon. The man was standing next to a car on the freeway.

The driver then heard four shots.

Victoria Police later confirmed the man had a knife. A spokeswoman said homicide detectives would investigate the incident.

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

“They’ve shut down the Monash Freeway going inbound and 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.”

The Department of Transport is urging motorists to exit the freeway as soon as they can.

“The scene is under the control of Victoria Police. The Monash Freeway will open as soon as it is safe to do so,” it said in a statement.

Police are appealing for anyone with dashcam footage to come forward.

The investigation will be overseen by Professional Standards Command, as is standard procedure following a police shooting.

-with AAP