Major manhunt underway for suspect in police shootout north of Adelaide

A major manhunt is underway and streets are in lockdown after police were involved in a shootout north of Adelaide.

9NEWS understands officers were shot at by a suspect in the Yorke Peninsula town of Wallaroo this afternoon.

The wanted man remains at large, with residents being told to stay indoors while the gunman remains at large.

Police say the area is bounded by East Terrace, Cornish Terrace, Gouge Street and Ryan Street.

SA Police Commissioner Grant Stevens said anyone who sees anything unusual to contact police. 

"We are looking for a man who has evaded police," Mr Stevens said.

"There have been some shots fired."

Local Steve Kutcher said residents were concerned.

"A lot of people are upset and worried, a lot of people can't get back to their homes," he told 9NEWS.

"There's a lot of tense people at the moment."