Video filmed by a woman from her Wollongong apartment has captured an escaped prison inmate as he pointed a stolen gun down Gladstone Avenue.
Sophie Hooper noticed a passer-by warning people away from an area outside the Piccadilly Centre about midday Wednesday, after a South Coast Correctional Centre inmate on medical release stole the gun of a corrective services officer, later turning it on himself.
Footage shows the man taking cover in an alleyway behind the centre before raising the gun at an unknown target.
"A guy ran up and kind of alerted everyone on the street - he was like, 'move out of the way'," Miss Hooper told the Mercury.
"Then he (the inmate) walked out - the man in the green sweater - with what looked like the gun.
"I saw him shoot at the police. He came out of that little alleyway that I believe he's in now (deceased).
"He went back in the alleyway and a few minutes passed before all the police started going inside there."
According to police, a passing dog unit vehicle was hit by a bullet in the incident but the officer and dog inside were unharmed.
The Mercury understands police did not return fire.
The deceased inmate was found with a gunshot wound to his neck. He has yet to be publicly identified.