A man has been shot by police in New South Wales after he allegedly lunged at officers with a knife, and has been taken to hospital in a critical condition.

Police were called to a home in Waterview Heights, west of Grafton, in the early hours of Wednesday morning following concern for the 36-year-old’s welfare.

Police said he lunged at officers with the knife upon their arrival.

The man was flown to Gold Coast University hospital in a critical condition.

A critical incident team will investigate the circumstances of the incident.