The Age are reporting that a woman and 4 children are being held hostage by a man in a house in Epping - just north of Melbourne city.
Police are attempting the negotiate with a man, believed to be armed with a handgun the siege.
The standoff is in Cooper Street and is believed to be across the road from a school.
Victoria police spokeswoman Natalie Savino said the man is wanted for arrest as part of an ongoing investigation by the Darebin Crime Investigation Unit.
Police are expected to be on scene for some time and road diversions are in place.
More to come.