Three people have died following a shooting west of Sydney in Australia's eastern state of New South Wales (NSW) on Thursday afternoon.

The NSW Police Force said in a statement that emergency services were called to reports of a shooting in the small town of Lake Cargelligo, 450 km west of Sydney, around 4:40 p.m. local time on Thursday.

Police confirmed that three people, two women and a man, had died.

A second man has been taken to hospital in a serious but stable condition.

A crime scene has been established and police have urged members of the public to avoid the area and local residents to stay indoors.