The incident at Sutton Bridge has now been resolved and police officers and staff have left the scene.
Officers were initially called to a domestic incident where threats of serious violence had allegedly been made against people who had earlier been in a house on the street.
Further enquires later established that the situation was not as first reported, resulting in the downgrading of police resources in the area. Further enquiries into all the circumstances will continue.
A spokesman for Lincolnshire Police said: “We can confirm that no-one has been injured and no-one has been arrested.
“We would like to thank the residents of Sutton Bridge for their patience during the course of the incident.
“From the information we received in the first instance it was appropriate that we treated the incident very seriously. Our main aim throughout was to ensure the safety and wellbeing of those involved and that of the wider public.
Armed officers are surrounding a home in Sutton Bridge this morning.
Few details have yet been released but it is known that Withington Street has been cordoned off, with the cordon being extended within the last half an hour.
A number of officers are on the scene, with one eyewitness reporting seeing armed officers.
The eyewitness also reported seeing neighbours hanging a banner from a nearby house calling for the police to “free” the man believed to be holed up in the house.
Police quickly removed the banner and moved members of the press and public further away from the scene.
Police were called at around 3.40am today and the incident is ongoing.