The Interior Ministry said that one attacker had died and another was "on the run" in the Austrian capital.
A large-scale security operation is underway and police have urged people to avoid all public spaces in the area and not to take public transport.
Road blocks have been set up around the city centre. Footage posted on social media showed people running as what was reported to be gunshots could be heard.
The shooting reportedly took place on a street near a synagogue.
Jewish community leader Oskar Deutsch tweeted that it was unclear if the Vienna synagogue was targeted in the attack as it was closed at the time.
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