A search is now underway for up to three others wanted over the violence in what's believed to be targeted attack at a residential address in Donnybrook, about 50 kilometres north of Melbourne's CBD.
Victoria Police Detective Inspector Graham Banks said three or four offenders armed with at least one handgun and a machete forced their way into the Middlemount Street home at about 4.20am on Sunday morning.
At least one of the men assaulted a female resident with the knife before a male resident confronted the group, he said.
"There's been some sort of struggle and a firearm has been claimed off one of the offenders who has come to the house," Det Insp Banks told reporters on Saturday.
"Shortly after that several shots have taken place."
The deceased man, who is yet to be identified, was found in the driveway by police and a window at the home appeared to have been smashed.
Later, another man with gunshot wounds presented to the Northern Hospital in Epping before being transported to the Royal Melbourne Hospital for surgery.
Officers are still working to establish whether he was involved but say he's a person of interest due to the time he turned up at hospital.
The injured female resident is receiving medical attention and the male resident is assisting with the investigation.
A firearm has also been found at Kumalie Drive in Doreen, about 20 kilometres away.
It's still too early to confirm the motive for the incident and officers are currently focused on identifying all parties involved, Detective Inspector Banks added.
"It's quite a shocking incident but as I say, we do not believe it is related to anything beyond that household," he said.
Detective Inspector Banks usually works with the Lunar Taskforce which is probing arson attacks linked to a conflict between rival crime groups over illicit tobacco.
However, he told reporters the dedicated squad is not investigating the Donnybrook incident and there's nothing connecting it to any matter being probed by the taskforce.
He also confirmed one of the Donnybrook residents was known to police.
Anyone who may have seen anything suspicious related to the incident at Donnybrook, the Northern Hospital or Doreen has been asked to come forward.
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