A third officer “was seriously injured after being shot in the lower body” in the incident near Porepunkah, around 300km (190 miles) northeast of Melbourne, shortly after 10.30am, Victoria Police said in a statement posted on its website.
No other officers were wounded in the incident on Tuesday morning, local time, but they remain at the property.
The statement said “it’s believed ten police attended the property on Rayner Track”.
“It’s believed the offender has since left the property and at this time his whereabouts are unknown,” a police statement said.
“A significant search is actively underway to locate the man.”
Detectives from the Homicide Squad are investigating, while members of the Armed Crime Squad and the Fugitive Squad are also on the scene, along with the Special Operations Group and Critical Incident Response Team, the statement said.
Earlier, the force said an incident was under way after officers tried to carry out a search warrant and asked people to avoid the area.
The Australian Broadcasting Corporation (ABC), quoting Ambulance Victoria (AV), said another person injured in the shooting has been taken to hospital.
An AV spokesperson said it is “on scene” and its paramedics “have treated one person for serious lower body injuries and transported them by air ambulance in a stable condition”.
ABC’s Sharnelle Vella said the gunman is on the run and “heavily armed”.
Quoting police contacts, Ms Vella said officers believe the shooter is a so-called “sovereign citizen” and that police were serving a warrant from the sexual crimes squad, known as SOCIT.
Sovereign citizens believe the government is illegitimate.
10 News Melbourne said “heavy gunfire has stopped officers from entering the property as they await the arrival of the Special Operations Group”.
The outlet quoted three police sources who spoke on condition of anonymity, that the dead officers “were killed in an ambush attack”.
The local council’s facilities, including libraries, information centres and depots would remain closed until further notice, Porepunkah mayor Sarah Nicholas said.
Around 90 students at the Porepunkah Primary School had to go into lockdown, sheltering indoors from 11.30 am, principal Jill Gillies told ABC Radio Melbourne, which has since reported the restriction has been lifted.
The local airfield also closed due to the ongoing emergency response.
In a statement on the X social media platform, Jacinta Allan, the Premier of Victoria, said: “A police operation is currently under way in Porepunkah, in Victoria’s northeast.
“I have been briefed by the Chief Commissioner of Victoria Police. This situation remains active.
“Victoria Police officers, and all our first responders, show extraordinary bravery and courage every single day.
“They are the best of us – and the thoughts of all Victorians are with them today.”
The Porepunkah Pub has said on Facebook it will be closed on Tuesday evening “following advice from Victorian Police” saying “the safety of our staff, guests, and community is our priority”.
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