Commandos from Austria's elite 'Cobra' police force launched the operation to root out the 55-year-old gunman just before nightfall yesterday, at around 6:20 pm (2150 IST), the Austria Press Agency (APA) reported, quoting a police spokesman.
Army tanks and hundreds of armed police in bullet proof gear were deployed to the poacher's home, which had been surrounded since early yesterday after he allegedly shot and killed four people.
Police spokesman Johann Baumschlager said earlier the man "appears to be heavily armed," calling the situation "terrible and very explosive".
Reports said that the man's children may be inside the house with him although police said he lived alone. The surrounding area has been cordoned off.
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The fire brigade and Red Cross workers were on standby at the house, but the outcome of the operation remained unclear late yesterday.
Police commandos reportedly attempted to stop the man in his car on Monday after a tip-off that he was hunting illegally.
He drove through a road block and opened fire, reportedly after driving into a ditch, shooting one of the police commandos in the neck who died two hours later in hospital.
The suspect, who owns a transport company, then fled on foot for several kilometres before firing at two other police officers, killing one on the spot and taking the other hostage.
He stole their police car and drove, with his captive, some 60 kilometres to his farmhouse.
Police said yesterday afternoon that the dead body of the officer taken hostage had been found in the police car in a shed at the farm.
He was said to have had his hunting licence revoked several years ago.
The poacher legally owns several weapons and lots of ammunition, mostly for hunting, a popular pastime in Austria, reportedly including a powerful hunting rifle able to pierce protective clothing.