Six people were killed during the shopping centre shooting in Munich, German public broadcaster BR reported.
Multiple shots were fired on Hanauer Street before the attack moved to the Olympia Einkaufszentrum shopping centre in the south German city at around 6pm on Friday.
Witnesses told police there were three gunmen, who are now on the run.
Munich Police tweeted: “The suspects are still on the run. Please avoid public places.”
The force added: “Please don’t take Fotos or Video of Police Action in order to avoid any helpful Information for the suspects.”
In unverified footage, a man with dark hair, wearing a black T-shirt and denim trousers, appears to take aim at people outside a McDonald’s restaurant near the Olympia-Einkaufszentrum metro station.
He raises his arms, apparently holding a shotgun, and appears to fire at people outside the restaurant, who can be seen running for cover.
The sound of multiple shots being fired can be heard as shoppers and passers-by run for cover.
People were seen fleeing from the building in another video posted on social media.
In a picture posted online, a person can be seen lying on the ground covered in blood.
Police have responded to the attack in large numbers. Dozens of vehicles can be seen lining the street outside the shopping centre, and a number of armed officers and a helicopter are at the scene.
A cordon appears to be in place and the area has been evacuated.
The shopping centre in the northern part of Munich is not far from the city’s Olympic stadium in the Moosach district of the Bavarian capital.
The number of casualties or any fatalities have not yet been confirmed by authorities.
British nationals in Germany are being advised to comply with instructions from local authorities.
A Foreign Office spokesman said: “We are urgently investigating an incident in Munich and stand ready to provide assistance to British nationals.”
There are unconfirmed reports of shootings in other parts of the city, Munich Police said.
It tweeted: “Unconfirmed reports of more violence and possible #gunfire in the City Center. Situation is unclear. Please avoid public Areas.”
Munich Police said in a statement: “At around ten to six today there were witnesses who called the police and said there was a shooting at the Hanauer Street.
“The shooting moved from that street to the shopping centre. The witnesses said there were three different people with weapons.”
The police said that they did not have any details about the number of victims or injuries and that no arrests had been made.
They said that the Metro system is not working at the moment and urged people to stay at home or seek shelter inside nearby buildings.
Munich’s main railway station has been evacuated and rail travel and local public transport in the area has been stopped, according to Bavarian radio station Antenne Bayern.
Nightclubs in Munich will be closed on Friday night, a local television network reported.
Drivers have been urged to clear the motorways surrounding Munich, the newspaper Abendzeitung said.
Meanwhile, refuge is being offered to people stranded near Munich through social media.
Several people are feared dead and many are thought to have been injured in a gun attack near the Olympia shopping centre, prompting the closure of transport links across the city. Munich Police have urged people to avoid public places.
In response, hundreds of people have taken to Twitter using the hashtag #OffeneTur - or #OpenDoor - inviting people to stay if they are unable to get home.
Facebook’s Safety Check feature has also been activated so that people can let friends and family know that they are safe.
It was most recently used in the wake of the Nice attack earlier in this month.
People also opened their homes under the hashtag #PorteOuverte during the Nice attack and Paris attacks in November to help people find safety.