One of the gunman said they were demanding the resignation of President Serzh Sarkisian and the release of political prisoners but the country's security services dismissed rumours on social media that a coup was under way.
"A group of armed men entered the premises of a police regiment in Yerevan and is holding hostages under the threat of violence," Armenia's National Security Service said in a statement.
"One policeman was killed and two others wounded. Two hostages were freed," it said.
Nikol Pashinyan, a lawmaker who met the hostage-takers, told journalists that the group had taken eight police hostage but released one who was suffering from high blood pressure.
"The Armenian state continues to operate normally, police carry out their duties to protect public order and security," the security service said, dismissing the coup rumours.
Media reports said the group was demanding the release of Zhirair Sefilyan, an opposition politician who was arrested last month for alleged possession of firearms.
He said two top police officers, Armenia's deputy police chief General Major Vardan Egiazaryan and Yerevan deputy police chief Colonel Valeri Osipyan, were being held.
One of the gunmen, named as Tatul Tamrazyan, has been seriously wounded, Avetisyan wrote.
The group later released a video on Facebook, calling on Armenians to take to the streets against the government.
The video showed several men in flak jackets and armed with Kalashnikovs as well as several hostages being held inside the police building.
"Join us! For now, we are holding the positions. We will stand as long as we can," another gunman said in the video statement.
Military and police cordons were blocking streets around the Erebuni station today afternoon with vehicles including an armoured personnel vehicle, an AFP photographer witnessed.
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