Norwegian police said an officer in his twenties and a suspect had died after an overnight shootout on Saturday in the Nordic nation where police rarely die in the line of duty.

The last time a police officer was shot and killed in the line of duty in Norway dated back to 2004, according to the Norwegian news broadcaster NRK.

Saturday's deadly shooting took place in Klepp near the city of Stavanger in southwest Norway, and also resulted in another officer being wounded, police said.

"The mission last night had the worst possible outcome. Two human lives have been lost and the police have lost a dear colleague," said police commissioner Marie Benedicte Bjornland in a statement on Saturday.

"This is the ultimate and most tragic consequence of police work," she added.

Police had been alerted to reports of a threatening situation involving weapons after midnight on Saturday.

Two police officers and the suspected gunman in his forties, who was sitting in a car, were shot in the subsequent exchange of gunfire.

Critically injured, one of the police officers and the suspected man died on Saturday.

Fatal shootings of police officers are extremely rare in Norway and the other Nordic nations.

"This is a very serious and tragic event that affects us all", said Norwegian Prime Minister Jonas Gahr Store to NRK. (AFP)