Police were negotiating with a gunman into Tuesday morning, after Senior Constable Brett Forte was killed during a traffic stop west of Brisbane Monday afternoon.
Queensland police high command said they could not reveal details about the Lockyer Valley incident as it was an "active investigation", but the police force would throw "whatever resources" needed at the operation.
"We have a person contained at the scene and at my advice we are negotiating with that person," Commissioner Ian Stewart said.
"Our job is to resolve the current operational issue without further loss of life."
Police confirmed Ricky Charles Maddison, 40, was armed with a semi-automatic weapon in what Commissioner Stewart described as a "very, very serious matter".
Southern Region Assistant Commissioner Tony Wright said Senior Constable Forte was a member of Toowoomba's tactical crime squad who had served in the Queensland Police Service for 15-and-a-half years.
Other police officers at the scene of the shooting had been able to extract Senior Constable Forte and themselves.
Queensland Police Union president Ian Leavers said the senior constable's death was a tragedy for everyone in Queensland.
"One of our colleagues was murdered this afternoon by simply trying to apprehend an offender," he said.
"It is a tragedy. I knew him, he was a decent person: a family man who was respected by all of his colleagues."
Mr Leavers said Senior Constable Forte's family and colleagues were being supported.
"His partner who was working with him is in good spirits, as good as you can be at this point in time," he said.
Commissioner Stewart said it was a "very, very sad day" for the police service, and their thoughts and condolences were with Senior Constable Forte's wife, child, family and colleagues.
"It is so distressing not just to police but to the community that we've lost a police officer," Commissioner Stewart said.
"We will miss Brett deeply."
Officer Brett Forte was killed and others were injured in a pursuit after a "wanted man" believed armed with a machinegun evaded police in a traffic stop in the Lockyer Valley just before 2pm on Monday.
A police source says the shooter got out of his car during the chase and shot the officer before driving down a dirt road at Seventeen Mile, just north-west of Gatton.
It's understood another police vehicle rolled over after the chase resumed and the offender also fired at a police helicopter while entering a farm house.
By sunset the gunman was holed up in the farm house inside a locked-down area and in a siege situation with Special Emergency Response Team officers.
In a tragic coincidence, Senior Constable Forte's death comes on the anniversary of slain Gold Coast detective Damian Leeding's shooting after he responded to an armed robbery at the Pacific Pines Tavern in 2011.
Queensland Premier Annastacia Palaszczuk sent condolences to Senior Constable Forte's friends and family and said members of the public should be "immensely grateful" for the work of the police force.
"Every day, the brave officers of the Queensland Police Service put their lives on the line when they go to work," she said in a statement.
Wayne Lyons, who lives on Wallers Road, said he saw four police cars chasing a four-wheel-drive in the early afternoon before the vehicles disappeared into a wooded area.
This was followed by what Mr Lyons described as gunfire that "sounded like a machinegun" and what he thought sounded like pistol shots in return.
He said in the hour since the opening exchanges of gunfire, he had heard occasional shots until just before 4pm.
He said helicopters had been circling overhead and police cars had been tearing past his home and he estimated the gunfire to be three to four kilometres from his home.
Police declared an emergency situation at 3.40pm with an exclusion zone in place for the area of Fords Road, Forestry Road West, Sandy Creek Road, Gerard Lane, Seventeen Mile, Wallers Road and Forest Road.
Lockyer Valley mayor Tanya Milligan reinforced the police advice for residents to remain inside and expressed her condolences for the police officer's family.
"It is devastating for officer's family, his colleagues and his community," she said.
"The police officer woke up this morning to do his job and he had people who loved him.
"It is just exceptionally sad."