Gunshots heard in the Napier suburb of Taradale on Sunday were reportedly fired during an altercation between Mongrel Mob and Black Power gang members.
Police confirmed that officers responded to a firearms incident around 1pm on Gloucester Street, near the local McDonald's and shopping centre.
A cafe worker told RNZ that gang members were on the street at the time of the shooting. A number of locals have also claimed in community Facebook groups that gang activity was the source of the gunfire.
Police confirmed that one person was injured in the altercation and has been taken to hospital.
Cordons remain in place and the scene is currently being examined.
Police are warning the public to avoid the area for the time being.
Earlier on Sunday, a 49-year-old man was arrested after police responded to reports of gunfire on McClutchie Road, Ruatoria.
The arrested man is expected to appear at Gisborne District Court on Monday, charged with unlawful possession of a firearm.