A man has died outside a pub in Redfern, after he allegedly drove at them and hit a pedestrian in a truck stolen from the City of Sydney council, a senior police source says.

The man, who is believed to be in his 40s, was driving a small work truck down a "shared zone" road near Redfern station just before midday on Friday when police opened fire.

The truck crashed into the outside of the Railz Hotel.

A NSW Ambulance spokesman said: "One patient is unfortunately deceased".

The source told Fairfax Media the council had reported one of their trucks as stolen.

When police called on the driver to stop, he allegedly accelerated, hit a pole and a pedestrian, the source said.

"Police believed he was using the vehicle as a weapon and also drove at officers, who escaped before the truck crashed," the source said.

Shots were fired, but the cause of the man's death is yet to be determined.

Paramedics were treating two other people, believed to be pedestrians, for minor injuries, the ambulance spokesman said.

A witness, who did not wish to be named, said he heard two gunshots. He then saw the truck with a smashed windscreen and crumpled roof.

The male police officer who allegedly fired the shots was being consoled by other officers.

"He was walking back from the scene and other officers had their hands on his shoulder," he said.

A few minutes later, the officers reached inside the smashed car to pull the man out.

The witness said the man slumped out of the car and onto the road. "His body was slumped between the door and it fell down," he said. "It looked like he was gone."

Several ambulances have been requested and are attending the scene.

This incident has echoes of another police shooting in April, when officers shot a 14-year-old male driver and his 18-year-old passenger after their car mounted a busy footpath in Kings Cross.

- FFX Aus