Hostage situation in Melbourne following blast

Police are dealing with a hostage situation in Australia's Melbourne city after an explosion on Monday.

A major police operation is underway at a Bay Street apartment, following reports of the explosion at 4 p.m. (local time), reports the Australian Broadcasting Corporation.

A Victoria state police spokesperson said officers were trying to negotiate with a man in one of the apartments.

"It's believed he has a woman inside with him who he won't allow to leave."

"Victoria Police specialist units are currently on scene. Roads are closed in the vicinity and we urge the community to avoid the area," the spokesperson added.