RESIDENTS and guests at a Marcoola resort were evacuated amid explosion threats from a man armed with a gas bottle.

A 50-year-old man was taken into custody and then to hospital after a three-hour standoff with police.

About eight police cars rushed to Marcoola Beach Resort about 1pm after reports of a man with a gas bottle threatening to cause an explosion on the second floor.

Level by level the complex was evacuated by police, who directed residents to the edge of the property near David Low Way.

"Police knocked on our door and asked us to evacuate - we didn't really know what was going on," resident Richard Sommerville said.

Residents of the beachside complex mingled out the front for more than two hours as police negotiators talked the man down from his unit.

Police said the man was the only person inside the unit at the time of the threats.

Lawrence Hindley said he and his wife were just about to put their son down for a sleep when they heard a knock at their door.

"The manager said there was something about a gas leak ... there were a whole lot of cops running around the building so we knew it was serious," he said.

Inspector Mike Miley said police negotiators used a range of tactics to talk to the man before entering the unit.

"We negotiated from different levels initially until he gained confidence, which then allowed police to go in there and talk to him face-to-face," Insp Miley said.

"The evacuation was necessary for the safety of the gentleman himself, for emergency responders and for the people at the resort."

An emergent situation was declared under the Public Safety Preservation Act shortly after police were called, but was later revoked.

The residents returned to their homes about 4pm.

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