A farmer says he's responsible for alerting police to the man who allegedly gunned down two people at the WINZ office in Ashburton.

Police are investigating following a shooting at a WINZ office in Ashburton

Police caught 48-year-old Russell John Tully after a massive manhunt.

The 33-year-old farmer says he made the call to police after spotting Tully on his property.

He told ONE News Tully was wearing a backpack, woolly hat, a green shirt and was carrying his bike.

The farmer says his "heart leapt out of my chest" and he immediately jumped on his bike and called police. They met him down the road and a two hour police search began.

He says Tully was found near the road of his property.

Canterbury District Commander Gary Knowles says Tully is suffering from dog bite wounds.

Mr Knowles said Tully was tracked for some distance and there was a minor resistance before he was bitten by a police dog. No police officers were injured.

The arrest brings an end to a tense day for the Ashburton community where around 100 police officers scoured the town for Tully.

Last month the Ashburton Guardian published a story of how Tully had been sleeping in a tent by the riverbank and wanted a state house to live in.

The newspaper also reported that Tully had also contacted NZ First leader Winston Peters about his housing situation.

Work and Income staffers are traumatised, the Social Development Minister Paula Bennett says.

"I just can't believe that two people got up to go to work this morning, their families would have waved them goodbye"

Ms Bennett was visibly emotional as she described the situation as "horrific"

Tully was trespassed from the Ashburton Work and Income office a few days ago, but Ms Bennett says it is too soon to go into the details.