Police were searching a disused brewery after a man carrying what was believed to be a gun was seen entering the building.
South Yorkshire Police said there was a large police presence in the Neepsend Lane area of Sheffield after reports about the man were received at about 5.15am on Friday.
A spokesman said: "Officers were immediately deployed and secured the scene.
"The area being searched for the man within the brewery and disused land is vast and to ensure the public's safety while this is carried out, a number of roads have been cordoned off and will remain closed throughout the morning."
The force warned of "significant disruption for traffic and pedestrians due to a number of closed roads" because of the search.
A large area was cordoned off by police in Neepsend, which is about a mile from Sheffield city centre.
Workers in industrial units who were prevented from entering the sealed-off streets said the focus of police attention was the old Cannon Brewery, where Stones Bitter was brewed until the 1990s.
They said the large site is completely derelict and sometimes used by squatters.
Ian Fox, who works locally, told BBC Radio Sheffield: "We just came down Rutland Road and it was blocked off with a police cordon.
"It's not very good at all, is it?
"In this day and age it seems to be more rife than ever.
"It's an inconvenience, yes, but it's good that they're protecting the public."
Neepsend is one of Sheffield's oldest industrial centres is now mainly made up of industrial units and derelicts sites. It is not a residential area.