Australian police are hunting a gunman who shot dead two officers and wounded another on Tuesday as they tried to serve a warrant for historical sex abuse allegations to a man at a rural property in the state of Victoria, local media said.

State police said they were attending an active incident in the alpine town of Porepunkah, about 300 kilometres north-east of Melbourne and asked people to avoid the area.

Local media outlet The Age reported that police visited the property to serve a warrant for historical sex abuse allegations when the ambush happened.

It said heavily armed officers from the Special Operations Group were deployed and the gunman was now on the run with several family members, including children.

The Australian Broadcasting Corporation said police believe the shooter is a "sovereign citizen".

Sovereign citizens believe the government is illegitimate.

Australian Federal Police Commissioner Reece Kershaw said there were “grave concerns” for the police officers involved.

“Just from the police blue family, the wider family across Australia and overseas, our thoughts and prayers are with Victoria police right now,” Kershaw said.

The town of Porepunkah is home to 1,000 residents and located at the base of Australia’s alpine ranges.

“Today has been a day of deep sorrow and shock for our community. We extend our heartfelt condolences to the families, friends, and colleagues of the two police officers tragically killed in Porepunkah," mayor Sarah Nicholas said.

Local council's facilities across the town including libraries, information centres and depots would remain closed until further notice, she added.

Porepunkah Primary School principal Jill Gillies said the school was forced to lockdown, with around 90 students sheltering indoors for a spell from 11.30am.

The local airfield also closed due to the ongoing emergency response. (Reuters)