Gun shop owners will fight the decision to suspend the sale of guns and ammunition in Victoria following a spike in weapon registrations in the midst of the coronavirus pandemic.

An association representing up to two dozen Melbourne gun dealers is preparing a legal challenge against the ban which they say could financially devastate the families of hundreds of firearms traders.

Police Minister Lisa Neville on Tuesday. Credit:AAP

On Monday Victoria Police, with the backing of the Andrews government, temporarily banned the sale of weapons to recreational shooters, who make up a large proportion of the market. Police said there had been a spike in firearm applications and stockpiling of weapons this month.

Gun dealers strongly disputed the police's claims and say the surge in demand was caused by shooters buying products before a 15 per cent price rise on many firearm products that was due to kick in on April 1, caused by the drop in the value of the Australian dollar compared with the US dollar.