Man in custody after terrifying hostage situation south of Sydney

Terrifying scenes as rifle-wielding man wearing a balaclava and flak jacket stalks the streets of Wollongong and fires shots before taking a person hostage inside a shop

A man wielding a rifle and wearing a flak jacket has fired shots on a shopping strip in a Wollongong suburb before taking a hostage inside a shop.

The terrifying scenes developed in Windang on Sunday morning and were captured by an eyewitness, with video footage of him armed with a rifle stalking the streets outside shops.

‘What the f**** going on? Is he for f**** real?’ a shocked onlooker is heard saying. 

Police were called to the scene shortly after 9am following reports of an ‘active shooter’ roaming the streets.   

The man reportedly took a hostage inside a dive shop during the incident.

A NSW Police spokesman confirmed to Daily Mail Australia a man has since been arrested and is now in custody.

Police are unaware of any casualties or injuries at this stage.

‘There is no active threat to the community. Police remain in the area and further updates will be provided shortly. There have been no reports of injuries,’ a police statement read.

A number of road closures remain  in place and local have been urged to avoid the area.

More to come.