The raid happened on Thursday night near Chandler Court and Francis Street, close to the centre of the town about 300km northeast of Melbourne, around the same time Victoria Police issued a "dangerous person" alert at 9.34pm.
Footage released online and put up on the Herald-Sun website showed police cars and officers at a property.
Journalists on the scene reported that a person on a loudspeaker told people to come out "with nothing in your hands". It's believed a number of people were spoken to by police.
Victoria Police are yet to confirm any of the details of the operation, as the search for Dezi Freeman, 56, enters its fourth day.
Officers will on Friday scour mines, caves and dugouts for Freeman, as tough weather conditions continue to impact the search.
Freeman - also known as Desmond Filby - fled into bushland after he allegedly killed Detective Leading Senior Constable Neal Thompson, 59, and Senior Constable Vadim De Waart, 35, at a Porepunkah property on Tuesday.
Another wounded officer, who was among a group of 10 attempting to serve a search warrant relating to alleged child sex offending, is expected to recover after undergoing surgery.
Weather conditions on the ground are forecast to deteriorate on Friday after showers laced with hail and thunderstorms passed through on Thursday, bringing wintry conditions including snowfall to 600m above sea level, senior meteorologist Angus Hines said.
Every available asset and police capability was being deployed on the ground to apprehend Freeman, Deputy Commissioner Regional Operations Russell Barrett said.
"That's our purpose, and we will not rest until it occurs," he said on Thursday.
Superintendent Brett Kahan said the terrain was difficult and dangerous.
"It's not something that we, even with our specialist resources, can move through quickly," he said.
Police continue to speak with Freeman's wife, as officers investigate properties, mines, caves and dugouts in the area.
"We will systematically search areas of interest," Mr Barrett said.
Anyone assisting Freeman has been urged to reconsider or risk serious punishment, while the accused gunman himself was urged to surrender.
"Ring triple zero, and we will support a surrender plan. That option is absolutely open to him," Supt Kahan said.
The bodies of the fallen officers were given a guard of honour by flashing-light police cars as they were taken to Melbourne Coroners Court on Wednesday night.
Det Snr Const Thompson was cut down in his "last week or so" of work before retirement, and Snr Const Vadim De Waart had a "great career in front of him", Mr Barrett said.
Freeman, who has bush survival experience, was last seen wearing dark green tracksuit pants, a dark green rain jacket, brown Blundstone boots and reading glasses, police said.
He is believed to be a sovereign citizen, an ideology that questions government authority and whose followers believe the rule of law doesn't apply to them, and who disassociate from society.
10°C