Police rapid response teams sealed off part of Donegall Street following reports that a man, wrapped in a sheet and a tea towel, had been spotted pointing a suspected firearm from a window.
There was a heavy police presence at the scene as armed response officers searched the SHAC building opposite St Anne's Cathedral.
An eyewitness told UTV: "My friend and I stepped out of the elevator to come out of the SHAC building on Donegall Street - straight into an armed response officer with a riot shield and another standing behind him with a rifle.
"Everyone was searched and details taken for police checks."
We were told to quickly leave the building and get off the street as quickly as possible.
Police recovered three suspected replica firearms from a room.
"An investigation is now underway to identify and apprehend anyone involved," a PSNI spokesperson said.
Donegall Street has since reopened.