Moscow police said they were able to negotiate the release of two of the hostages, both employees of the bank, shortly after 1700 GMT, but did not reveal how they were freed.
According to police the drama began when a man entered a Citibank branch, located just one kilometre away from the Kremlin, shortly before 1600 GMT and was understood to have taken four people hostage -- three bank employees and one customer.
An unnamed sourced in law enforcement told Russian news agencies that the hostage taker, whose identity has not been disclosed, was apparently inebriated and had threatened to blow up the bank.
Investigators said they had opened a criminal probe into the incident and that the two freed hostages were being questioned.
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