Officers were called to a branch of the Bella Italia restaurant chain at 8.50pm, where a man was reported to be holding a woman hostage with a knife.
Photos on social media show a large number of police vehicles and dozens of officers, including some in riot gear, in the area and part of Leicester Square has been cordoned off.
It is thought there are four people in the restaurant and the group know each other, according to Sky sources.
Police, who have surrounded the building and have been trying to negotiate with the man, said the incident is not believed to be terrorist related.
The Metropolitan Police said in a statement: “Police are in attendance at a restaurant in Irving Street, WC2.
“It is reported a male, who has intimated he is in possession of a knife, is holding a woman against her will inside the venue.
“Two other people are reported inside the venue. Officers are on scene and attempting to engage with the man and resolve the situation.”
More to follow.