Among those inside the mosque in downtown Christchurch were members of Bangladesh's national cricket team, according to a Bangladeshi journalist, Mohammad Isam.
Bangladesh Cricket Board spokesman Jalal Yunus said most of the team were bussed to the mosque and were about to go inside when the incident happened.
"A serious and evolving situation is occurring in Christchurch with an active shooter", Police Commissioner Mike Bush said.
Local media said another mosque had been evacuated.
New Zealand Police have stormed the area and are urging anyone in the area to stay indoors.
The national public broadcaster Radio New Zealand quoted an eyewitness who said, "There was blood everywhere".
The entire Bangladesh cricket team present at the site was just saved from the incident.
"They ran back through Hagley Park back to the Oval", he tweeted.More news: Sephora drops YouTube star over college bribery
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Christchurch schools will be locked down until further notice.Police thanks the public for their cooperation and will provide further updates to keep residents informed.
New Zealand Police says one person has been taken in cusotdy.
Muslims account for just over 1 percent of New Zealand's population, a 2013 census showed.
New Zealand Prime Minister Jacinda Ardern described the incident as an "unprecedented act of violence".
All schools and hospitals in Christchurch have been placed in lockdown.
"I've lived next door to this mosque for about five years and the people are great, they're very friendly", he said.
Sabir Hussain, who was inside Linwood Mosque, said he was "doing a prayer when our Imam (the leader of a mosque) said our brothers have been shot".
According to reports, the squad, along with the traveling media personnel attended the Friday prayers at the mosque, which is near the Hagley Oval Stadium where the match is set to be played.
People wait outside a mosque in central Christchurch.