A Victorian man arrested after an overnight stand-off with police was an associate of a the victim of a fatal Father's Day shooting in the same seaside town.
The 30-year-old, who was living in a tent on a property in Rosebud, was taken into custody early on Tuesday after an operation that started about 8pm on Monday when he told police he had a hostage.
"Homicide squad is following up the fatal in Rosebud on Sunday and as a result we identified a person of interest who is an associate of the victim," Homicide Squad Detective Inspector Mick Hughes told reporters.
The female hostage, believed to be the man's partner, was released about 3.40am on Tuesday.
Heavily armed police moved in on the property about 6.30am and following a series of loud bangs the man was arrested.
"He subsequently has been injured by the police dog that was used in that arrest," Det Insp Hughes told reporters.
"He is in police custody and is seeking medical attention for a severe bite to his leg."
A 31-year-old man was shot in the head shortly after enjoying Father's Day lunch with his parents Rosebud on Sunday night. He died in hospital on Monday.
Police now say the victim may have attended the property where the latest incident occurred on the day of the shooting.