Dramatic new details are revealed of gunman's deadly shootout with police - as witnesses reveal how he shot passing cars at random on the road

A man has been shot dead after confronting police with a rifle on a major highway, as shocked witnesses told how he opened fire at them as he drove past.

Two officers fired at the 36-year-old man when he emerged from a stolen car alongside the Bruce Highway in central Queensland and pointed the rifle at them, police say.

The man had stolen the vehicle containing the rifle and ammunition south of Gladstone on Monday.

Police said he later confronted a 61-year-old woman at a Colosseum address with the weapon, demanding her car keys.

'He has then stolen another four wheel drive utility from that address, driving through ... (and) destroying the front gate on the way out,' Detective Superintendent Darrin Shadlow said. 

One witness revealed he saw a police alert that a gunman in a stolen Land Cruiser ute was heading towards his roadhouse.

Moments later other vehicles arrived peppered with bulletholes.

'He was just shooting at whatever was going past as he was driving past,’ the man told 9News.

'A truck driver come in who had a couple of bullet holes in his truck where he had been shot at. He was shaken up a little bit... I made him a coffee.'

The Bruce Highway was closed for hours before it was reopened on Monday night

The Bruce Highway was closed for hours before it was reopened on Monday night

The man had allegedly stolen a vehicle containing the rifle and ammunition south of Gladstone on Monday

The man had allegedly stolen a vehicle containing the rifle and ammunition south of Gladstone on Monday

A police patrol later came across the stolen ute on the Bruce Highway but did not try to intercept it.

Det Supt Shadlow said the man then parked on the side of the highway and got out, pointing the loaded rifle at police.

Officers told him to drop the weapon but 'he didn't do that and unfortunately police had to engage and subsequently shot that male person'.

Officers performed CPR and paramedics were called but the man died at the scene.

'It's obviously a very tragic circumstance,' Det Supt Shadlow said.

'Police don't go to work expecting this to happen. However, they are trained and they are ready if something like this does happen.

'Unfortunately this male person has given the police no option.'

Det Supt Shadlow would not detail how many shots were fired by police but said counselling would be provided to the officers involved.

'They were shaken up yesterday afternoon. All support is being given to them,' he said.

The incident is being investigated by Ethical Standards Command.

The Bruce Highway was closed for hours before it was reopened on Monday night.

Police respond to the shooting south of Gladstone

Police respond to the shooting south of Gladstone 

 The 36-year-old man was from Cairns but had been travelling 'in and around' central Queensland for the past week.

'We have had some interactions with him,' Det Supt Shadlow said.

READ MORE: Distraught parents of a young dad shot dead by police make bombshell claim