A man brandishing a gold pistol was spotted wandering around Mt Victoria in Wellington on Thursday afternoon.
A member of the public called police to report the gunman around 12.30pm.
Nearby Wellington East Girls' College was briefly put into lockdown, but that was later lifted.
Just after 2pm the school posted on their website that "police have advised us we can exit from lockdown and resume normal activities.
"School will finish at the scheduled time today and end of day arrangements should be unaffected."
However, the suspected gunman has not been found.
The gunman was described as being of Maori or Polynesian descent, wearing a green jacket and baggy trousers.
Police are still searching the area for him, and are asking the public to call them with any sightings.