No one else is being sought in relation to the incident.
Police found the injured man - who had been shot in the arm - shortly after they were called to a Hunter St property in Dannevirke about 11am.
Around midday the Armed Offenders Squad (AOS) went to a property in Woodville, which police confirmed was related to the search for the Dannevirke shooter.
Just after 1.30pm, a Bush Telegraph reporter at the scene said it appeared Police had apprehended one of the men, who was holed up in a house on the corner of Richardson and Ferguson Streets.
Police had taken the property's gate off its hinges and a police dog entered the property. About ten minutes later, a man was brought out of the house, and led to a Police car.
A Police spokeswoman was unable to confirm this was the man suspected gunman, but police would be releasing a statement shortly.
Earlier, police had been using a megaphone to try and communicate with the man.
The Bush Telegraph reporter said Police had been widening the Woodville cordon, with concerns spectators could be in the firing line.
"They've got police dogs here, and quite a few police and armed offenders squad.
"They think he might escape from the house he's in to another house so they've got that staked out in case he escapes. They're covering quite a wide area."
A Caltex Woodville staff member said Police had cordoned off Ferguson and Richardson Sts, located several blocks behind the service station.
"[AOS] are there and there's lots of police everywhere," she said. "People have been told to stay inside."
Earlier, a man was shot in the arm in Dannevirke this morning.
Police found the injured man shortly after they were called to a Hunter St property about 11am.
He has moderate, non-life-threatening injuries and has been taken to Palmerston North by ambulance.
A white station wagon was seen leaving the property after the shooting.
Police know who the offenders are and are trying to find them, a police spokeswoman said.
"We do not believe there is any risk to the wider community.
"However, residents of Hunter St and the surrounding areas can expect to see a continued police presence today as we examine the scene and speak to potential witnesses."
Hunter Street resident Chris Bone lives around six houses away from where the shooting occurred.
He said he had not heard any shots, but had seen around four police cars racing down the street.
More to come
