An ISIS-inspired terrorist stabbed six people at an Auckland supermarket on Friday before police who had him under surveillance shot him dead, New Zealand Prime Minister Jacinda Ardern said.

"What happened today was despicable, it was hateful, it was wrong," she said, describing the attacker as a Sri Lankan national who arrived in New Zealand in 2011.

New Zealand police shot dead the man as terrified crowds fled for the exits.

Police said the attack occurred when the man entered the Countdown supermarket in the city's New Lynn suburb as people were doing afternoon shopping.

"Police have located the man and he has been shot. He has died at the scene," they said, offering no information on the man's motivation in carrying out the attack.

Three in critical condition

The St John Ambulance Service said six people were taken to hospital, three in critical condition.

Details of the attack were scarce, with some witnesses saying the man was wielding a knife and others describing hearing gunshots.

Auckland is currently in COVID-19 lockdown as it battles to contain an outbreak of the highly transmissible Delta variant.

Prime Minister Jacinda Ardern's office said the New Zealand leader was being briefed on the situation and would hold a press conference later Friday.

There was a similar supermarket attack in Dunedin in May when a knife-wielding attacker wounded four people.

New Zealand's worst terror attack was the Christchurch mosques shootings in March 2019, when a white supremacist gunman murdered 51 Muslim worshippers and severely wounded another 40.