"Police are responding with its full capability to manage the situation, but the risk environment remains extremely high".
Police commissioner Mike Bush said all schools in the city had been placed in lockdown in response to "a serious ongoing firearms incident".
Police have not yet described the scale of the shooting, but urged people in central Christchurch to stay indoors.
A reporter following the Bangladesh cricket team, who are now in New Zealand, tweeted that that had "escaped from a mosque near Hagley Park where there were active shooters".
"I saw some people drop dead and some people were running away", he said.
Local media said multiple people were killed in the incident.
Christchurch Hospital and the city's university were also on lockdown.
About 300 people were inside the mosque for afternoon prayers.
Witnesses reported seeing a man dressed in a military-style, camouflage outfit carrying an automatic rifle entering the Masjid Al Noor Mosque in Hagley Park. "About ten minutes later they ran out of the bus and ran through Hagley Park and into the Hagley Oval".
The Bangladesh team were able to return to Hagley Oval, where Saturday's third Test was scheduled to take place.
Armed police have been deployed after receiving reports of shots fired in the city center at 1:40 p.m. Friday local time.
Members of the Bangladesh cricket team after the attack.
"Police believe there may be other offenders", the New Zealand Police tweeted.
"When I heard that there is a shooting - the sound whats coming". And a second one, I ran.
"I've lived next door to this mosque for about five years and the people are great, they're very friendly", he said.