Gunshots rung out around Monte Carlo as armed robbers raided a Cartier jewellery store, after starting a fire in a nearby tunnel to distract emergency services.
At least one robber was wounded by police, a second was also arrested, while another was on the run following the spectacular afternoon heist, reported The Daily Mail.
Police have launched a massive manhunt for the third man who was last spotted fleeing nearby the flame engulfed tunnel on Casino square.
Hundreds of tourists looked on in horror as a gang started a fire the tunnel well-known for featuring in Monaco's annual grand prix.
As emergency services rushed to put it out, at least three gangsters rushed into the Cartier shop on the square where the casino is situated and made off with a haul of high-value goods.
Two years ago, in May 2015, the Cartier boutique in Cannes was attacked by robbers, who got away with around £15million worth of goods.
Well organised gangs have long targeted the lucrative region.
Guests in the surrounding cafes and shops were trapped indoors.
One woman, at the Cafe de Monaco, located opposite the jewellery store, said: "I asked what was going on, then we had to stay inside for half an hour. In the lobby where there were security guards," according to Nicematin.
"It was when they tried to make off in car that police intervened," said a source in the Mediterranean principality, on the French Riviera near Nice.
"At least one person was wounded by gunfire. He was arrested along with another suspect. A third is still on the run. He was last seen in an underground car park opposite the casino."
Police received a call soon after 4pm, and an armed intervention squad was on the scenes within minutes, said the source.
Monte Carlo - the central part of Monaco - then went into lockdown, with the casino shut, and shops pulling down their security screens.
Nobody was hurt beyond the robber, said the source, who said there was no initial estimate for the value of the jewellery taken.
A car was later found burnt in a tunnel on the highway leading from the Portier to Grimaldi Street.
In December, a Serbian armed robber got into the casino's own jewellery store and took a member of staff hostage before trying to escape.
The shop had only recently relocated from the Hotel de Paris to the casino because the hotel was being renovated.
The Serb was soon arrested in the main square with millions of pounds worth of jewels, and is currently awaiting trial.
Security was meant to have been stepped up since then, with the number of guards in the area increased.
In recent years one criminal group called the Pink Panthers - made up of mainly ex-soldiers from Balkans countries such as Serbia - have regularly struck there.
The Panthers got their nickname after hiding a £500,000 diamond stolen during a London raid in a jar of face cream.
This was a tactic used in the original 1963 Pink Panther film, starring Peter Sellers as Inspector Clouseau.