An 11-year-old boy has died from head injuries and his father was shot after threatening police with a knife at a packed cricket ground south-east of Melbourne.

Officers opened fire after failing to subdue the man with capsicum foam at Tyabb cricket oval on the Mornington Peninsula.

Paramedics called to the sports ground on Frankston-Flinders Road, around 6:30pm (AEDT) on Wednesday, treated the boy but were unable to revive him.

When police officers arrived at the scene they were involved in a confrontation with the boy's father, who rushed at them with a knife.

The man, aged in his 50s, was then shot in the chest.

He was flown to Melbourne's Alfred Hospital where he is in a life-threatening condition.

Witnesses say there was chaos at the scene as children were attending cricket and football practice.

Police Commander Doug Fryer described the incident as horrific.

"His mother is clearly absolutely distraught and our thoughts and prayers go out to her and the extended family," he said.

Police say a number of people saw the incident and urged anyone who has not spoken to officers to contact them.

Wayne Murray lives near the oval and says he heard two gunshots.

He says he cannot believe what happened.

"I've got an 11-year-old grandson at home, it's scary." he said.

Officers are carrying out an examination of the oval, which is near Tyabb pre-school, and the road that leads to the sports ground has been closed.

"The exact circumstances surrounding the incidents are yet to be established," police said in a statement.

Local police, detectives and the homicide squad are at the scene.

Police say the Professional Standards Command will oversee the investigation.