Police are searching for Dezi Freeman. Photo: Victoria Police

A manhunt is underway for Dezi Freeman, 56, who is heavily armed and experienced in wilderness survival skills, Victoria state's chief commissioner of police Mike Bush told reporters.

The local residents have been urged to stay indoors.

The whereabouts of Freeman's wife and two children were initially unknown, but Mr Bush said they had visited a police station and spoken to officers late on Tuesday night.

The shooting happened earlier on Tuesday, when 10 armed police officers tried to execute a search warrant at Freeman's property in Porepunkah, a town of just over 1,000 people located 200 miles north-east of Melbourne.

The officers "were met by the offender and they were murdered in cold blood," the police chief said.

Freeman killed a 59-year-old detective and a 35-year-old senior constable, Mr Bush said. Another detective was shot, but his wounds are not life-threatening.

The armed man fled alone on foot into the nearby forest, where an intensive search for him continued through the night and into Wednesday.

Mr Bush would not elaborate on the search warrant for Freeman's property and said it was "too soon to say" if his attack on the officers was ideologically motivated.

But he told reporters that some of the officers who tried to execute the search warrant included members of a unit that investigates sexual offences and child abuse.

Australian media widely reported that Freeman expressed so-called sovereign citizen beliefs, referencing a 2021 video from Wangaratta Magistrates' Court in which he is seen representing himself and unsuccessfully trying to arrest a magistrate and police officers.

Members of self-proclaimed sovereign citizen movements use debunked legal theories to reject government authority.

In a 2024 finding from Victoria's Supreme Court, where Freeman attempted to challenge a lengthy suspension of his driver's licence, a judge noted that the man had "a history of unpleasant encounters with police officers".

In his submissions to the court, Freeman referred to the officers as "Nazis" and "terrorist thugs".

The chief commissioner would not say how much was known of Freeman's beliefs before the visit to his property.

Porepunkah, famous for its vineyards and beautiful views, is a gateway to Victoria's alpine tourist region.

On Tuesday, public buildings and the nearby airfield were shut, and the local school, with just over 100 students, was locked down for several hours before children and staff were permitted to leave.

"Be vigilant, keep yourselves safe," Mr Bush urged residents on Wednesday. "Please don't go outside if you don't need to."

Mr Bush said the suspect's knowledge of outdoor survival skills posed a "challenge" to authorities.