UPDATE 4PM: Police have arrested a man following a siege in a café in Rye today.
Two women aged 45 and 42 who were inside the café were released from the building shortly before the arrest and have been taken to hospital for observation.
The man surrendered himself to police without incident about 3.20pm.
The alarm was raised when the man was seen entering the shop, near the intersection of Ozone Street and Point Nepean Road, allegedly armed with a firearm about 7.45am.
The 69-year-old man, who is believed to have been armed, is currently being interviewed.
No one was injured during the incident.
VICTORIA POLICE STATEMENT:
Police were called to a bakery in Rye this morning following reports a man was armed with a firearm.
The alarm was raised when the man was seen entering the shop, near the intersection of Ozone Street and Point Nepean Road, about 7.45am.
The initial report received by police indicated that another person was in the shop with the man.
It has now come to light that there appears to be two people in the shop with the man reportedly armed with a firearm.
The area has been cordoned off while police negotiate with the man.
The Special Operations group are on scene with local police and Critical Incident Response Teams.
The incident is not believed to be terror related and police believe at this early stage that all the parties are known to one another.
The Herald Sun report that an armed gunman took a woman hostage about 7.45am.
The bakery is near the intersection of Ozone Street and Point Nepean Road.
Police said at this stage the incident is not believed to be terror related.
UPDATE 9:50AM: Victoria Police have locked down a bakery in Rye on the Mornington Peninsula in Victoria after reports that a man entered the shop with a firearm.
The bakery near the intersection of Ozone Street and Point Nepean Road.
There are reports another person is still inside the shop.
More to come.