A 33-year-old man who was shot by police after stabbing an officer in the upper body has died, Winnipeg police said late Saturday night.

The injured officer is a member of the police tactical unit and is 35 years old. Police said he received what are possibly "life-altering injuries" and was initially taken to hospital in unstable condition. He has since been upgraded to stable condition and remains in hospital.

The 33-year-old man who stabbed an officer was shot by another officer, ​Const. Jay Murray said. He was transported to hospital in critical condition where he later died.

"We have attended that house in the past for this individual," Murray said. "We will say that this individual was known to police."

Const. Jay Murray said the officer's life was quite possibly saved by the use of a tactical tourniquet, which was applied to the officer's shoulder area to stop the flow of blood.

The police tactical team was first called to a home on Madrigal Close, located in The Maples, at 4:10 p.m. for a report of a stabbing.

Helen Crane, who lives across the street from the house, was one of the people who first called police, worried someone was hurt or would be hurt inside. She said a 14-year-old resident of the home came over to her house saying his older brother was inside with knives.

A Winnipeg police officer was taken to hospital for stab wounds on Saturday along with a male suspect who was shot by police in the 100 block of Madrigal Close. (Travis Golby/CBC)

"I called 911 for him and just shortly I got off the phone with the police officers, the police cars came," Crane said.

More than a dozen vehicles with lights flashing pulled up to the house and officers quickly surrounded every entrance to the home.

"They had rushed the front door and were kicking the front door in and yelling inside," she said. Soon after, the boy's mother left through a side door and then the two of them heard loud pops.

"When the gunshots were fired we both just started crying. It was pretty traumatic."

She watched "in total fear" as two men were taken out of the home on stretchers — the police officer who was sitting up and the 33-year-old who was on his back receiving CPR, Crane said.

Forensic investigators gather evidence off a fire truck that was parked on the 100 block of Madrigal Close. (Travis Golby/CBC)

The initial report of knives or a stabbing that brought officers to the home may have left a third man with minor injuries, but police are still investigating, Murray said.

"It's my understanding that it was very chaotic. We received numerous calls both from the involved residents and the area," he said.

Murray added a number of children were inside the home when the shooting and stabbing took place.

Two bungalows on Madrigal Close as well as a section of the street remain cordoned off with police tape Saturday evening. Murray expects the area will remain closed until Sunday or possibly later.

The shooting has been reported to Manitoba's Independent Investigation Unit.