A hostage situation in Charleston has ended after a gunman was critically shot and wounded, according to reports.

Charleston Mayor John Tecklenburg told reporters that several hostages had been freed after the assailant, whom the mayor had earlier referred to as a “disgruntled employee”, had been shot and was in critical condition. One person was shot and killed, Mr Tecklenburg told reporters.

Police officers engaged for hours in a tense standoff with the still-unidentified shooter, who holed up with multiple hostages inside a downtown Charleston restaurant. A section of King Street, in the city's central commercial district, was blocked to cars and pedestrians.

Multiple local news outlets reported that the hostage-taker was a dishwasher who had worked at the restaurant and that the slain man was a chef.

The city's mayor said the shooter was likely a “disgruntled employee,” according to the Post and Courier.

“This was not an act of terrorism,” said Mayor John Tecklenburg earlier in the day. “This was not a hate crime.”