A two-car crash that has forced the closure of the main route in and out of Wellington city was reportedly caused by a man driving the wrong way into incoming traffic.

And witnesses say after the impact he got out of his car wielding a large knife.

A man can now be seen standing on the overhead pipes at the city-end entrance to the tunnel, surrounded by police officers below.

Police say the man is in a "distressed state".

The man is perched on the pipes above the city-end tunnel entrance. Photo / Supplied
The man is perched on the pipes above the city-end tunnel entrance. Photo / Supplied

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

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There are reports of gridlock in the central city and police advise motorists to use alternative routes or delay their journey.

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

Police had earlier confirmed they responded to a two-vehicle collision that has closed the
Terrace Tunnel in both directions.

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

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."

The tunnel is closed until further notice.

Police are expected to release further information about the incident later today.