A police operation that forced a suburban Wollongong street into lockdown for hours this morning came from a dispute over fireworks and a neighbourhood dog.

Key points: Neighbours say a man was arguing with authorities about aggressive dogs

Neighbours say a man was arguing with authorities about aggressive dogs Witnesses believe they heard gunshots, sparking the police lockdown

Witnesses believe they heard gunshots, sparking the police lockdown A 41-year-old man was taken into custody

A perimeter was established around Buttonshaw Drive in Coledale at 9:00am as part of a "major emergency response" after residents reported hearing gunshots coming from a house.

Several homes were evacuated as officers set up a command post supported by a police helicopter, paramedics and specialist negotiators to coordinate the response.

Police made contact with a 41-year-old man in the home where residents said the shots came from, and after a two-hour period were able to end the "situation".

A neighbour on the street said the situation was sparked after the 41-year-old refused to allow authorities to come onto his property to talk about two aggressive dogs.

It is understood the council rangers had attended the property three times to pick up the dogs in question, but were refused entry by the 41-year-old.

Speaking on the incident today, Detective Inspector Brad Ainsworth confirmed the man set off fireworks on his front lawn.

Residents believed they were gunshots and called the police, sparking the evacuation and police lockdown.

A NSW Police vehicle can be seen blocking a road in Coledale. ( ABC News: Kelly Fuller )

"I can confirm there were no firearms produced, no shots fired," he said.

"There was no safety issues to the public."

He said the 41-year-old man has been taken into custody and was likely to be issued with criminal infringement notices.

"That will be in relation to handling and possessing that were fireworks," he said.

Wollongong Council staff removed two dogs from the home this afternoon. They will be taken to the pound to be put down.

Local resident Jerry, who did not want his surname used, said it had been a dramatic culmination of a tense few weeks.

His property backs onto the home where the siege occurred.

"I heard [shots] and the next thing I know my dogs are going ballistic and two police officers are walking across my property," he said.

"The family's bull terrier had got out for the second time three weeks ago and attacked the goat of a neighbour on the other side of the street.

"Council had come three times to collect the dog and have it put down but he refused entry to the council officers."