1st LD Writethru: Three shot at Australian industrial site in Sydney

A man was killed and two others were injured and taken to a hospital following a shooting at a signage business in Sydney's outskirts, Australian police said on Monday.

Armed police continue to surround the business in Sydney's outskirts, with an armed gunman still inside.

A person of interest has been arrested and led away in handcuffs in relation to the incident, said acting New South Wales (NSW) Police Commander Mark Brett.

"The deceased is 43 years old. Two men with gunshot wounds have been conveyed to Liverpool Hospital," Brett said.

"One is undergoing emergency surgery, the other has superficial wounds to the lower part of his body."

Police did not answer questions on whether the gunman had any hostages.

"It's at a delicate stage."

"I really can't give you any more information."

Emergency services were called to the site at around 10.45AM (AEDT) on Monday.

Five gunshots were heard in the area, according to nearby businesses.

An employee at a nearby business told AAP that one person was dead.

"Police told us not to go near windows," the employee said.

Members of the public are advised to avoid the area."

Australians are still on alert following a lone gunman who took 17 hostages at a café in Sydney in December 2014.

Two hostages were killed along with the gunman during the 16-hour siege. Endit