Witnesses told local media there were several casualties inside the building. Police have warned people to avoid the area.
Christchurch hospital and all of the city's schools have been placed on lockdown.
Eyewitnesses have reported running for their lives to escape a shooter.
Mohan Ibrahim told the New Zealand Herald: "At first we thought it was an electric shock but then all these people started running.
"I still have friends inside.
"I have been calling my friends but there are many I haven't heard from. I am scared for my friends lives."
The Al Noor mosque is located in central Christchurch along Dean Avenue, facing Hagley Park.
Witnesses have reported seeing bodies, but this has not been confirmed by police or officials.
There are reports that a second mosque in the suburb of Linwood has also been evacuated.
A spokeswoman said Canterbury District Health Board (CDHB) has activated its mass casualty plan, according to New Zealand news site Stuff.nz.
The plan includes clearing emergency room space for casualties. The spokeswoman did not comment on how many patients were expected.
Police have cleared Cathedral Square, where thousands of children were holding a rally for action on climate change.
Police Commissioner Mike Bush said: "A serious and evolving situation is occurring in Christchurch with an active shooter.
"Police are responding with its full capability to manage the situation, but the risk environment remains extremely high.
"Police recommend that residents across Christchurch remain off the streets and indoors until further notice. Christchurch schools will be locked down until further notice.
"Police thanks the public for their cooperation and will provide further updates to keep residents informed."
A reporter following the Bangladesh cricket team, who are currently in New Zealand, tweeted that the team had "escaped from a mosque near Hagley Park where there were active shooters".
Player Tamim Iqbal tweeted that the "entire team got saved from active shooters".