The Armed Offenders Squad has descended on Rotorua's CBD after reports of a man with a gun.

Police were called to Pukuatua St just before 3pm.

Three police cars surrounded a car on the corner of Pukuatua and Tutanekai Sts while six armed police officers got out and pulled two men out of the car.

Senior Sergeant Denton Grimes of the Bay of Plenty District Command Centre said police had been told it wasn't a "real gun" and police were dealing with the situation.