Armed police have been deployed in the city centre, and all schools in the area have been placed on lockdown.
“A serious and evolving situation is occurring in Christchurch with an active shooter,” New Zealand Police Commissioner Mike Bush said.
“Police are responding with its full capability to manage the situation, but the risk environment remains extremely high.”
The Bangladesh cricket team was heading to Friday prayers at the mosque, the Masjid Al Noor, when the shooting started, but all members are safe, a team coach told local media.
It is unclear how many people may have been injured, but one witness told the AP news agency that he heard dozens of gunshots.
Len Peneha said he saw a man dressed in black enter the Masjid Al Noor mosque – followed by people running from the building in terror.
He also claimed that he saw the gunman flee before emergency services arrived.
Police did not comment on whether the incident took place inside the mosque or nearby.
“Horrified to hear of Christchurch mosque shootings. There is never a justification for that sort of hatred,” said Amy Adams, a member of parliament from Christchurch.
The Bangladesh cricket team’s strength and conditioning coach, Mario Villavarayen, told the New Zealand Herald that the team was close to where the shooting occurred.
“The players are shaken up but fine, he was quoted as saying.
The team is currently in Christchurch to play New Zealand in a third cricket test starting on Saturday.
Mass shootings are a rare occurrence in New Zealand, with the last being in 1990 in the small seaside town of Aramoana where 13 people were killed as well as gunman David Gray.