A woman has died in hospital after being shot by police on a suburban street in Geraldton, about 400 kilometres north of Perth, leading friends and relatives to question why police didn't employ non-lethal force to deal with her.

Key points: The woman died in hospital after receiving a single gunshot wound on Tuesday night

The woman died in hospital after receiving a single gunshot wound on Tuesday night A police spokeswoman said Major Crime and Internal Affairs were investigating

A police spokeswoman said Major Crime and Internal Affairs were investigating Witnesses said a group of about eight police were crowded around the woman

Officers were at a house in Geraldton, about 400 kilometres north of Perth, shortly before 6:30pm on Tuesday when the 29-year-old woman was shot after police were overheard by witnesses telling her to drop a knife.

"During an incident at the address, an officer discharged their firearm causing a woman to receive a gunshot wound," a WA Police spokeswoman said.

"The 29-year-old woman was conveyed by ambulance to Geraldton Regional Hospital where she later died."

The ABC has chosen not to name or use a picture of the woman without family permission because of her Indigenous heritage.

Police are investigating the incident and have officers from the Major Crime Division, Professional Standards Portfolio and the Aboriginal Affairs Division involved.

'Black lives matter 2': Protest builds at police station

Family members and friends gathered on Wednesday to protest outside the police station against what they said was excessive force used in the situation.

There are conflicting witness reports about what happened right before the woman was shot.

Some of the protesters held signs that read "Black lives matter 2", "What is a taser for?" and "Is it open season on Blackfellas?".

Friends and relatives of the dead woman confront police outside Geraldton station. ( ABC news: Cameron Wilson )

A friend of the victim, Sandra Comeagain, said people wanted answers.

"Who's safe in Geraldton?" Ms Comeagain asked.

"If they can do that to her, well they wouldn't give a stuff about doing it to any other black person.

I've got grandkids, I've got great grandkids growing up in this town, what's their future if they can get away with this?"

The woman was also remembered by her friends who mourned her loss.

"[She] was a lovely girl, she might have been on drugs, but she was a lovely person," Ms Comeagain said.

"There's no need for that. Where were the tasers? Where was the pepper spray? She would have been still here today."

Forensic officers examine the crime scene the morning after the shooting. ( ABC News: Cameron Wilson )

Ms Comeagain said she doubted a police investigation would provide any answers.

"She wasn't my family, she was my little friend who always was a happy-go-lucky girl," she said.

"It hurts for [her] to be taken like that. And maybe we'll never get any answers, you never know, that's how it goes.

"Look at all the black deaths in custody. No-one's answered to them. So this is just going to be swept underneath the carpet like all the rest.

"They say black lives matter but they don't."

WA Police have issued city-wide liquor restrictions "due to high emotions within the Geraldton community, permitting only mid-strength beer to be served and one bottle of wine sold to customers".

Sale of all spirits, full-strength beer, pre-mixed drinks, cash wine and fortified wine will be prohibited until Saturday.

Geraldton's Mayor Shane Van Styn spoke about the restrictions.

"Earlier on [Wednesday] we had a congregation of folks show up outside of the police station adjacent our court house and make themselves known on the streets and we had to deploy our traffic control measures and the like," he said.

"They're restricting the sale of things like ready-to-mix drinks and full-strength cartons, which is quite a significant ban that we haven't seen before here in Geraldton."

Officer traumatised by incident: Police

Regional Police Commander Alan Morton said senior officers had been working closely with the woman's family and community members to help everyone "get through this tragic incident".

"A number of specialist police resources have been deployed to the Midwest–Gascoyne district to assist with this investigation, that includes the Major Crime Division, Professional Standards Portfolio and the Aboriginal Affairs Division," Commander Morton said.

"In addition to that internal oversight there's also oversight by the Corruption and Crime Commission and further independent investigation by the state coroner."

Commander Morton said it was very traumatic for the officer who pulled the trigger.

"No one expects to commence duty and have to use lethal force in the execution of that duty," he said.

"Tragically it was not the case for that officer [Tuesday] night."

Family say they called police to get medical help

Family spokesman Sandy Davies said the woman had returned home from a mental institution a few days ago, and the family called police for help to get her back to hospital.

"She was having difficulty at home with her family [Tuesday] night and her family called police to assist to get her to the hospital, and as a result of that she was shot dead by a police officer," he said.

Family members held a three-hour meeting with police earlier [Wednesday].

Mr Davies said the family told him regardless of the circumstances, they would never phone police for help again.

"The family were very traumatised and people can understand that," Mr Davies said.

"It was very raw on their mind and it was a very emotional time in that room [Wednesday], and very few people sitting in that room weren't crying."

A police car at the scene of a police shooting on Petchell Street, Geraldton. ( ABC News: Natasha Harradine )

Mr Davies said the family have questioned why police were not wearing body cameras during the incident.

"Police responded by saying 'well, they hadn't been rolled out in Geraldton yet'," he said.

"The State Government should be ashamed of themselves because the camera structure was agreed to and passed in Parliament and should have been rolled out across the length and width of the state now."

The Police Minister's office released a statement saying the roll-out of more than 600 cameras had already started in some districts, but the Mid West-Gascoyne district was not expected to receive them until next August.

It also said the Minister had asked police to look at what would be required to make the roll-out happen faster.

Mr Davies also said the family had been promised around-the-clock access to police and access to the police report before it was sent to the coroner.

'She's been shot, ring the ambulance'

A witness living on the same street said her sister heard a bang and then saw police crowd around a woman on the ground.

"All of a sudden police were like, 'get down, get down, get down', and bang, the gun went off," she said.

"I come running out here looking like what the hell … when I looked there were like eight police on the ground around the young woman.

Police descended on the crime scene this morning. ( ABC News: Zachary Bruce )

"I was concerned thinking it was one of my sisters, that's why I was running out there.

"I had my daughter on me and I went out there and I heard, 'she's been shot, ring the ambulance', so I just grabbed her ([daughter] and ran back inside … I was terrified, it was scary."

Witness says woman stepped back before being shot

A teenager named Bobby who was walking down the street as the incident unfolded said it all happened very quickly.

He said police in one vehicle pulled alongside the woman and she began shouting at them.

When another vehicle arrived, they all jumped out.

"They were telling her to put that knife down and they shot her," he said.

Bobby said the woman was not lunging at police but had taken a step back.

WA Police Union president Harry Arnott said the union was standing by its members involved in what he called a "tragic incident" and said he would travel to Geraldton [on Wednesday] to ensure their health and welfare.