A stand-off in a suburban street between an armed man and police has been captured on video, with officers pointing their weapons and ordering him to surrender before he is knocked down by a police car.

Key points: Two police officers were injured in the altercation

Two police officers were injured in the altercation The man is now in custody

The man is now in custody The incident is being investigated by Tasmania Police's Professional Standards unit

A 20-year-old from Berriedale had allegedly used a knife to hold up at the Guardian Pharmacy on Main Road at Montrose just after 9:00am today.

An alarm was triggered and uniformed and plain clothes police swamped the area.

The dramatic stand-off happened on the road outside Dean Willcock's grocery shop.

"We just heard all these police cars arrive and then we poked our head out the front of the shop and a man was coming out of the chemist with a knife," he said.

"Police asked him for a fair while to put the knife down."

The incident was captured in a video posted to social media.

Police surrounded the man with their guns drawn, repeatedly ordering him to put the knife down.

Mr Willcock said it was "confronting"

"They all had their guns out and things like that. We just kept the elderly customers in the shop," he said.

They (the elderly customers) were a bit more shaken, as staff we just kept everybody inside."

An unmarked police four-wheel-drive was used to try and corral the man. After two near misses, the vehicle can be seen driving into and knocking him down, sending him sprawling on the ground.

The man was capsicum-sprayed, with officers rushing to the disarm and restrain him.

Praise for police actions

Mr Willcock said police "definitely [did] the right thing".

"It went on a fair while and I don't know what would have happened if they didn't hit him with the car. I thought they were going to do something a bit earlier to be honest," he said.

The chemist the man had allegedly been in minutes before is also a methadone dispensary, but Mr Willcock said they had never had this sort of issue before.

"Not like this, no," he said. "It's pretty random, it was a bit of a shock.

Detective Inspector Troy Morrisby said the police had given the man appropriate instructions to drop the knife and to surrender.

"At that point in time police sprayed OC spray, or capsicum spray, at the male at that time which unfortunately was ineffective," he said.

"It's very easy for people to make commentary in regards to the job police do on a daily basis, it's very easy for people to make commentary from the comfort of their own house, or when they replay a matter two, three, four times, ten times, and then make commentary on what should have been done.

Police described the result of the stand-off as an "excellent outcome" where the person was "safely taken into custody and no members of the public were injured". ( Supplied )

Detective Inspector Morrisby said police were "called on a daily basis to put themselves in harm's way, to protect both the people that they're dealing with, members of the public, themselves, and as part of that they have to make split second decisions".

"I can't stress highly enough that the decisions made in this matter ultimately lead to an excellent outcome where the person was safely taken into custody and no members of the public were injured."

Two police officers were injured in incident, with one understood to have torn his Achilles tendon.

The incident is now being investigated by Tasmania Police's internal investigation unit Professional Standards.

Police Association president Colin Riley said it was a difficult situation.

"It is complicated," he said. "They're trying to protect other members of the public, they're trying to protect themselves and they're trying to protect the offender from himself as well."

The Police Association is demanding to know whether the stand-off will be documented as an attempted police provoked shooting, inline with recommendations made by the coroner last year in relation to a police shooting at Cooee in the state's north-west.

Tasmania Police has so far declined to comment on the union's calls.