Reuters earlier reported that a number of people were hurt in the incident in Roubaix which began shortly after 7pm local time (6pm Irish time).
The neighbourhood in the town, located near the Belgium border, was closed off by police while the situation was ongoing.
Local authorities have said that the hostages involved have now been moved to a "secure place".
Earlier, witnesses reported hearing gunshots after armed men took a number of people hostage.
It is understood that a bank manager and his family were held captive, with police source suggesting that the motive was robbery.
Prosecutor Frederic Fevre told reporters that one hostage-taker had been killed, and that police were hunting for other suspects who were on the run.
It is not believed the situation is related to the November 13 Paris terror attacks.
More to follow.
- Irish Independent