A man carrying a knife has been shot by police in Melbourne’s east, with the terrifying incident heard live on radio.

Victoria Police has confirmed the 24-year-old man was shot in the upper body after an incident at a shopping centre in Lilydale. He was flown to hospital for treatment.

A talkback caller identified as Pauline called Melbourne radio 3AW shortly after 9am on Tuesday, and was describing the scene when a volley of shots was heard in the background.

“Oh s–t, they are shooting. There’s just been three or four rounds,” she said.

Victoria Police later released a statement saying officers were called to a man armed with an edged weapon on Hutchinson Street about 8.30am.

“Officers attempted to speak with the man who refused to drop his weapon,” it said.

“An officer discharged their firearm, shooting the man about 9.10am.”

The talkback caller did not see the shooting, but was describing the confrontation when the shots were heard.

She had said the man was walking near the Lilydale Markets, adding police were telling him to put down the knife.

Just before the shots she said there were five police involved, with more arriving. An ambulance was parked nearby.

“He didn’t seem agitated,” she said after the shots were fired.

“He was just wandering, I don’t know if he meant to do anything.

“He wasn’t in an agitated state. He wasn’t waving the knife, he was just holding it.

“I don’t know what he did to cause them to let loose with gunshots.”

Asked if she was OK, the woman replied “[it’s] life these days, isn’t it?”.

Victoria Police said the incident was being investigated and Professional Standards Commands has oversight. Assistant Commissioner Neil Paterson said the man’s injuries were not life threatening.

He said the confrontation happened after police were called amid reports a man armed with a knife had entered a local medical centre.

“Police confronted a man who was armed with a knife, and made several and quite a number of requests for him to drop that weapon, and stay away from police,” he said.

“The man did not back off from police after quite a period of negotiation, then rushed the police members, where I can say that, a number of shots were fired by two separate police members.”

Assistant Commissioner Paterson said one of the officers involved had graduated from the police training academy only a few weeks ago.

Tuesday’s shooting follows a violent arrest in Melbourne’s north at the weekend of a man having a mental health episode that has led to a senior constable being suspended.

Assistant Commissioner Paterson said criminal investigation and a probe by Victoria’s Independent Broad-based Anti-corruption Commission had also been launched.

Footage from Sunday appeared to show the man, since named as Timothy Atkins, being knocked down by a police vehicle before another officer kicked him in the head during his arrest.

“It’s an inappropriate use of force by a police member with regard to the kick or the stomp to the head of the man involved in that incident,” Assistant Commissioner Paterson said.

“The use of force in using a police vehicle with the man involved in that incident is concerning … The driver of that vehicle has had the authority to drive a police vehicle withdrawn.”

Mr Atkins had gone to the Northern Hospital Epping to seek treatment on Saturday night. Police say he was still waiting for treatment on Sunday when he smashed glass doors and ran out of the emergency department.

He is in an induced coma following the arrest.

-with AAP