Police are appealing for public assistance following an incident in Wonthaggi this morning, Victoria Police say.
Investigators have been told a man was walking along McKenzie Road when he saw another man pointing a firearm from a distance.
The first man entered a nearby workplace and reported the incident to police.
Investigators believe the same man was brandishing a firearm and running down McKenzie Road between 7.30am and 8am.
No injuries have been reported.
Investigators are keen to speak to anyone who may have witnessed the incident.
Police arrested a man in his 20s, however he was later released pending enquiries.
Anyone with information about the incident is urged to contact Wonthaggi Police Station on 5671 4100 or Crime Stoppers.