The stand-off was sparked by reports a man had fired a gun in Daisy Hill, about 50 kilometres north off Ballarat, about 3pm yesterday.

No one was hurt in the initial incident but the critical incident response team, special operations group and dog squad were sent to the Menzies Drive home to respond.

Police said a siege lasting “several hours” ensued.

“The man discharged shots towards police, who returned fire just before 10pm,” Victoria Police said in a statement issued earlier this morning.

The man died at the scene, meaning homicide squad detectives will investigate the shooting, with oversight from the professional standards command.

The man has not been formally identified.