Multiple squads of police officers armed with rifles and tactical gear went into the Goodview Apartment Hotel in central Auckland after a reported gun sighting.
The standoff lasted more than two hours.
A cordon on Hobson Street between Cook Street and Union Street was lifted after three hours.
A man was taken out of the hotel in handcuffs and put into a police car just before 10.30am.
Police also escorted a woman away from the scene.
A witness told RNZ he saw two people arguing on the street. Soon after one of the pair "got up, put his hand in his pocket, pulled out a gun and loaded it and pointed it at him and said he's going to shoot him".