Three double-decker buses have been stationed near the Terrace Tunnel to assist police in the removal of a man who climbed onto overhead pipes.

Wellington's Terrace Tunnel remains closed almost 7 hours after a two-car crash that was reportedly caused by a man driving the wrong way into incoming traffic.

After the collision witnesses say the man got out of his car wielding a large knife.

He climbed onto overhead pipes at the city-end entrance to the tunnel where he has remained since, surrounded by police officers below.

Earlier police said the man was in a "distressed state".

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"Police continue speaking to the man involved and are working hard to safely resolve the situation," they said.

"This incident is ongoing and until it is resolved, the Terrace Tunnel will remain closed in both directions."

Police were unable to say when the tunnel will be reopened and advise motorists to use alternative routes or delay their journey.

The NZ Transport Agency have advised southbound traffic to use the Terrace off-ramp onto The Terrace, followed by Ghuznee St, Victoria St, then Vivian St.

For Northbound traffic, they are asked to use Willis St onto Ghuznee St, The Terrace onto Everton Tce, then to the Clifton on-ramp.

Fire and ambulance also attended the crash, which was reported at 12.25pm.

Police at the scene of the motorway exit at the city-end of the tunnel. Photo / Emme McKay
Police at the scene of the motorway exit at the city-end of the tunnel. Photo / Emme McKay

A couple driving south through the tunnel were about four cars behind the collision.

"As we got closer we realised that the car that basically caused the crash was coming north in the southbound lane," said the woman, who did not want her name published.

"We were like 'oh my God', it looked really bad."

The woman got her phone out and called 111 and was on the phone to police when the driver of the car believed to have caused the crash got out.

"My partner saw him get out of his car and stumble around, he was totally out of it … he was probably badly injured too, it's a massive crash.

"He was bleeding and stumbling around and we were about to stop and help but then he pulled a massive knife out."

The couple had their children in the car so made the call to keep going and get out of the fracas.

"Everyone was just trying to get out of the way," the woman said.

"Then he jumped up onto the median barrier, the wall between the lanes, and stumbled around on the top of that.

"We just kept driving."

The woman said the incident was scary.

Her partner said the knife was like a "large butcher's knife".

"We were like 'holy sh*t'," she said.

"It was a really bad crash and then the guy with the knife - that was insane, it was just mental."