UPDATE 2.57pm: A police spokesperson said police spoke to two young men at the scene and confiscated a plastic BB gun.
The gun had been fired into the air but there had been no injuries.
The young men had been spoken to by police and given a stern warning.
Two male youths seen in the possession of two hand guns were taken away in handcuffs by police.
A witness who declined to be named told the Bay of Plenty Times she had been on a smoko break outside the Westpac Building on the Strand when she saw two men, each with "a hand gun or pistol", and she called 111.
"They were aiming the guns in the sky...I don't know at what, whether at seagulls or something...but of course I was scared...you don't expect to see people with guns in public."
Police are attending a report of a man seen with a gun on The Strand, near the Tauranga waterfront. More details to follow