At least seven armed officers, four police vehicles and a dog handling unit could be seen on Maitland St just after 12pm today.
A police spokesman said the operation was pre-planned and related to police inquiries into a "person of interest".
A 42-year-old man was now in custody and had been charged with breach of bail, threats to kill and two counts of burglary.
He was due to appear in the Dunedin District Court tomorrow.
The street was cordoned off at the intersection with Stafford St and police activity was centred on a property near the intersection with Carroll St.
Police were speaking to people outside the property and two women, who appeared to be witnesses, were taken away in a police car.
Police remained at the property as enquiries continued, the spokesman said.
