Police officers stormed into a VTNZ depot in Glenfield and told customers to stay away from the windows because there was a gunman on the loose.
The man fled from police on foot after they pulled him over nearby and went into a building to hide, claiming he was armed with a firearm.
Police initially believed the man was unarmed and when he exited the store no firearm was located on his person.
However, shortly afterwards police discovered a firearm hidden in the roof of the building where he was hiding.
"Police searching the building have subsequently located a firearm hidden in the roof, which is believed to have been placed there by the offender," police said.
"The man is expected to face a number of charges and an update on these will be provided later today."
The Herald understands the man ran into a vehicle repair and servicing centre near the VTNZ - both properties were inside a semi-industrial part of Glenfield, close to Wairau Valley.
He ran into the building asking if he could use the toilet, a worker told the Herald.
"He's come running down our driveway, ran into one of my staff members. He's run into our toilet and we've seen a police car drive past," he said.
Workers approached the police car and asked the officer whether they were looking for someone.
"That's when all the police have turned up."
Meanwhile, a witness to the incident on Sunnybrae Rd spoke to a woman with a baby who was inside the VTNZ when police arrived.
The mother said officers told people to stay away from the windows before ushering them into a staffroom in the VTNZ.
The building was covered in glass windows and she did not feel very safe, debating whether or not to try and make a run for it with her baby.
Meanwhile, the site worker said armed police officers rushed into their building and surrounded it.
He said it was "all on" when the man allegedly told officers he had "something" on him.
"When they went to confront him, apparently he had something on him.
"He's smashed our toilet to pieces - he's tried to get through the walls, tried to get through the roof."
The worker said the man was wearing a hooded jumper and glasses and had a bag over his shoulder.
Other workers from a different building nearby said they thought the man had been wearing a gang patch when he ran past.
However, soon after officers told the members of the public the man had been arrested.
In a statement, police initially said it was established the man did not have a gun soon after he entered the store in Glenfield.
"The man agreed to exit the store where he was subsequently arrested without incident," they said.
Inquiries into the matter were ongoing and charges were likely to be laid.