The shooter who killed a woman in Greymouth yesterday afternoon is still on the run and may be armed, police say.

The woman was shot and killed at a house on Marsden Rd, south of the Sinnott Rd intersection, around 4pm yesterday.

A close neighbour, who did not want to be named, said she heard one gunshot.

At least 10 armed police then swarmed the area, she said. "The majority have gone now but there were cops everywhere."

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Fairfax reported the shooting happened at 110 Marsden Rd. A neighbour told Fairfax a woman had moved into the property in the last 12 months.

The victim of the shooting has not been formally identified, police said. A post mortem will be carried out tomorrow.

A scene guard is in place overnight at the property.

West Coast area commander Inspector Mel Aitken said the shooting had understandably upset many in the community.

"Police are doing everything we can to support the family during this difficult time.

"Our [Armed Offenders Squad] a police staff will continue to investigate lines of inquiry
through the night. Tomorrow's focus will be on the scene examination which will take some time.

"It is too early for Police to comment on specific details but we will provide further information as our investigation progresses."

Police believe the woman and the shooter knew each other but have not established that as a fact, Aitken said.

"Based on what we know at this time it is thought that the offender may have travelled from the address with an associate, and could still be armed."

Police initially did not answer questions about whether the shooter was still on the loose.

Aitken has since urged the public not to approach anyone who was acting suspiciously but report them to 111 immediately.

Information can also be reported anonymously to Crimestoppers on 0800 555 111.

St John Ambulance spokesman Gerard Campbell said an ambulance was called to the scene but was not required. He understood no one else had been injured in the shooting.

The street has been cordoned off from Sinnott Rd.

A neighbour told the Herald police intend to keep the cordon in place overnight and have told residents to stay indoors.

Police have also told residents not to speak to the media, she said.

Another neighbour who lives opposite the victim's house said he was home at the time but heard nothing, and police had not told residents anything about what happened.

"We heard absolutely nothing - we knew nothing and we still know nothing.

"I went out, they let me through the cordon but then they wouldn't let me back in."