UPDATE: Police have shot and killed the man who took over the Panera Bread in Princeton.

Police have surrounded a Panera Bread across the street from Princeton University's campus Tuesday morning in a standoff with an armed man inside the eatery, authorities said.

The situation began unfolding about 10 a.m. when officers arrived with guns drawn and crouched behind vehicles on Nassau Street, a block from Princeton University's Nassau Hall.

"We're currently negotiating with an armed subject (inside Panera)," Princeton Police Chief Nick Sutter said. He said the FBI and State Police were assisting.

Asked if there were hostages in the building, Sutter declined to comment.

Nassau Street was shut down between Washington and Witherspoon, as nearby businesses were evacuated. Princeton University evacuated Henry House and Scheide Caldwell House, the two campus buildings closest to the restaurant.

"It is not known whether the gunman has any connection to the University," Princeton University said in a statement on its website. "Classes are not in session, as this is the week of spring break."

Some members of the university received an erroneous phone call indicating that shots have been fired, but Princeton officials issued an update to clear up the confusion. "NO SHOTS WERE FIRED; THERE IS NO SHELTER-IN-PLACE order. Continue to avoid the area," Princeton University tweeted.

Princeton police keep people away from the Panera Bread on Nassau Street as they negotiate with an armed man in the eatery.

Tom Morrison, a retired sheriff's deputy from Kern County, California, said he was in Starbucks nearby on Nassau Street when he saw the police arrive.

"I ran outside to get some of the people who came to look behind the perimeter," Morrison said. "The police were operating with efficiency. They were putting up the perimeter pretty fast."

Troy said she saw people leaving the Panera.

"I did see one elderly man exit Panera bread he was OK but he looked confused and then more and more police came and the area still blockaded," Troy said.

Princeton New Jersey Nassau Street opposite the entrance of Princeton University Panera‘s bread there’s a man with a shotgun they blocked off Nassau Street at the intersection of Washington Road and also on the other side of Panera‘s — Suzannah B. Troy (@suzannahbtroy) March 20, 2018

Anthony G. Attrino may be reached at tattrino@njadvancemedia.com. Follow him on Twitter @TonyAttrino. Find NJ.com on Facebook.