Police have cordoned off an area around a travel agency where the victims are being kept, according to reports. Special forces and negotiators are on the scene at Asieland travel agency on Boulevard Massena, south of the French capital.
Daily Star Police have warned people to stay away from the area. The man is believed to be an armed robber with a handgun. (What is there to rob from a travel agency?)
It comes as the city is on high alert over terrorism fears.
Tourist hotspot Disneyland was on lockdown over fears ISIS may stage an assault.
UK Daily Mail Anti-terrorist police were among those who surrounded the business in the 13th arrondissement of the French capital. Authorities say a gunman is still on the loose, but hostages have now been freed.
A man brandishing a gun was seen running into the Asieland agency soon after 6.30pm, and was initially thought to be attempting a robbery. It was confirmed at 9pm local time that the hostages had been released, but the gunman was still at large.
France is currently under an official state of emergency following a series of terror attacks which have seen Islamic State and al-Qaeda killers striking in Paris.