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Police confirmed they were responding to the incident and cordons are understood to be in place in the area.
The offender remained on the loose, police said.
At 1.30pm police were still searching the Foxton area for the offender. A number of schools had earlier gone into voluntary lockdown as a precaution but as of 1.30pm that lockdown had been lifted.
Manawatu College confirmed it had been locked down as the incident was unfolding.
Just after midday, Manawatū College principal Bruce McIntyre issued an "urgent notice'' online, telling the public that police had asked the school to go into lockdown because of an incident on Main St.
"All staff and students are safe and despite rumours, there has been no incident here at Manawatū College.''
A worker at the Foxton Hammer Hardware said they were told a person had been shot.
He said, about 12.15pm, that police were at the back of their building.
He did not see or hear any gunshots, but said they had seen "the aftermath.''
"We've seen the aftermath - it's directly behind us. Someone's got shot,'' he said.
"We're only hearing bits and pieces."
He said the man shot had been taken in an ambulance about 10 minutes before.
A spokesperson said they had a call from police and were asked to go into lockdown due to the armed offender.
A St John spokeswoman said the service received a call at 11.22am.