Police have released the name of the woman fatally shot by police outside a Whangarei shop on Thursday.

She was Lee Jane Mettam, 37, of Onerahi, Whangarei.

The drama began when she entered the First Mobile Vodafone Shop in Reyburn St, brandishing a firearm.

Police said she took cash from the till and held a man hostage in the shop.

A witness reportedly overheard Ms Mettam say that one of the staff members “owes me money for drugs”.

The woman opened the door of the shop at least twice and was challenged by police to put the gun down and surrender.

Finally she opened the shop door again and reportedly pointed her gun at a member of the armed offenders squad crouched behind a car.

He fired one shot hitting her in the chest and she died at the scene. The firearm was later found to be an air rifle.

She was the first woman shot dead by New Zealand police.

Police have begun a homicide investigation, and the officer in charge of professional standards has been notified. The Independent Police Conduct Authority would also investigate.

Acting District Commander Inspector Chris Scahill described the shooting was a “tragic incident for all that have been involved”.

Police spokeswoman Sarah Kennett today said officers involved wanted to acknowledge the support of the local community and businesses in the area.

They would still like to speak to any witnesses, in particular anyone who saw Ms Mettam before she went to the shop.

She was described as having a thin build, with long brown hair worn in dreadlocks to her shoulders. At the time she was wearing a dark coat, a dark baseball cap and blue jeans.