Police are negotiating with a gunman who they believe shot dead a man outside at a grain silo in the WA Wheatbelt region earlier today.

Police said they located Lachlan Bowles, 25, at a rural location late this afternoon.

"We are attempting to negotiate a peaceful resolution, however the situation is still unfolding," WA Police said

"Residents in the area are advised to remain alert."

Police confirmed that one man was dead and the homicide squad is investigating.

The father-of-one is being remembered as a "valued member of the Kellerberrin community".

Officers issued an "active shooter alert" earlier today and urged residents of the small farming community of Kellerberrin to stay inside and avoid travelling by any means.

Bowles was soon named by police as a person urgently sought after, with the public urged not to approach him if spotted but to immediately call triple zero.

Police allege the gunman went to a grain silo in Kellerberrin, 200km east of Perth, about 8.40am (10.40am AEST) and discharged his gun.

He then fled in a vehicle.

Police said he was believed to be "armed and dressed in camouflage clothing".

Bowles was believed to be driving a 2007 Grey Holden Commodore, registration 1CRB764.

Police said they believed he ditched the vehicle and was on foot around Mission Road, in the Kellerberrin and Bencubbin areas.

"A large number of police resources have been deployed to the Wheatbelt area," WA Police said in a statement.

"Members of the public in the area are advised to remain indoors at all times."

Dozens of police have been sent to the town from as far away as Perth.

9News spoke to a local resident who said he saw the alleged shooter in his shop yesterday.

He said there was "nothing untoward" about him and described him as a quiet and softly spoken man who kept to himself.

"The gentleman who is the shooter actually two years ago got an award from the community on Australia Day for being a volunteer ambulance driver," he said.

The nearby Shire of Merredin local government area told residents on social media that it has closed all council-run facilities until further notice.

"Please be advised that all Shire facilities (including the Admin Centre and Merredin Tip) will be closed until further notice, as per WAPOL advice to remain indoors due to the ongoing incident in Kellerberrin," a Facebook post read.

"We are monitoring the situation and are aware netball finals are planned to be played tonight at the Rec Centre.

"Facilities will reopen as soon as we receive advice this is possible."

A family daycare operator in the town told Nine newspapers earlier today she sent all the children in her care home to families after she received the alert.

"It's a bit shocking because it's such a small town," she said.

"I'm just waiting for a message to say that it's safe to leave."

Kellerberrin has a population of 877 people and sits on the Great Eastern Highway in the state's Wheatbelt region.