The Armed Offenders Squad and Eagle helicopter were deployed to assist with locating the offenders and the two cars.
"It's been hectic this morning, armed police everywhere and the helicopter flying above," a man at the scene said.
A nearby resident described waking up to a loud bang in the middle of the night.
"We didn't actually think it was a gunshot originally but shortly after that there were police officers telling everyone to get back inside so we didn't go outside," she said.
"We could hear the lights and sirens, it got quite noisy."
This morning, armed police officers guarded the area outside her house, she said.
In the two years she had lived in the area, there hadn't been any incidents she could think of that were this extreme, she said.
"It's a very quiet neighbourhood," she said.
The stolen police car, along with all police equipment carried in the car, was recovered at 2.20am on Gordonton Rd, the police spokeswoman said.
"The driver's car was located in Sherwood Drive, Hamilton just after 4am."
Police have cordoned off the area near Bankwood Rd and Wake St.
Police guard the area where a police officer was shot in Hamilton. Photo / Hayden Woodward
The driver was also found at this address and taken into custody, police said.
It comes just a few weeks after the one-year anniversary of Constable Matthew Hunt's death.
The 28-year-old officer was shot dead in West Auckland on June 19 - making him the 33rd police officer to be killed in the line of duty in New Zealand.
Police Association president Chris Cahill said another officer getting shot was very concerning and his thoughts were with the officer and his family.
"Again it just highlights the risks out there that all police officers face and the fact that vehicle stops are one of the most dangerous things officers do."
He said this event could have had tragic results and it showed there were far too many offenders out there with firearms willing to use them against police.
"We certainly pleased this hasn't resulted in more serious injury."
Police officers attending jobs alone was a problem that needed to be addressed, Cahill said.
"Single crew in vehicles is relatively common and in rural policing to some degree it is required but we would argue in metropolitan centres there is no need for that any more."
National's police spokesperson Simeon Brown agreed it was "incredibly concerning", saying beyond the rising general violence there was also more anti-police rhetoric imported from overseas.
"The demonisation of the police – even at times by elected officials – contributes to more hostility on the streets and further aggression towards officers," Brown said.
He said tougher penalties were urgently needed to send a very clear message that assaulting a police officer was unacceptable and would not be tolerated.
"However, the Government does not agree. Labour voted down National's member's bill earlier this year which would have imposed harsher penalties."
Police Minister Poto Williams said police would conduct a thorough investigation.
"We want to make sure that everything is put in place to ensure that when police are on duty everything is as safe as it can be."
Williams said before the shooting police were already involved in a programme to improve their safety.
Cabinet was "working on the process" of getting a gun register in place to stop these weapons getting into the wrong hands, Williams said.
