A SWAT team has descended on a small town in Germany after two people were taken hostage inside a bank.

Police said they were alerted to the situation at the Volksbank branch in Sinzig, in the Rhine valley near Koblenz, about 9am.

The small town of about 17,000 people was thrust into lockdown as special operative police tried to figure out how many hostages were being held.

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Shortly before 3pm, seven members of the SWAT team stormed the bank, where they freed two uninjured hostages from a locked vault.

One of them was believed to be the driver of an armoured cash vehicle that had been ambushed.

"We are relieved that the hostages have been freed. They are deeply affected by what has happened," Koblenz Police spokesperson Juergen Fachinger said.

Police didn't find any hostage-takers in the bank, and believe the perpetrator or perpetrators left immediately after locking the people in the vault.

Police didn't indicate whether any cash or valuables were stolen.

The Volksbank branch is now a crime scene, as detectives investigate how the hostage takers escaped without notice.

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