Update: The man suspected of committing Tuesday's shooting has been "shot dead" following a police operation which began at approximately 9pm local time, reports Sky News.
Two police sources confirmed to Reuters that the 29-year-old was killed in the Neudorf-Meinau area of the city after a police operation was launched at around 9pm local time.
Earlier, witnesses reported "at least three" gunshots were heard in the district and a police helicopter was seen hovering overhead.
Earlier in the day, dozens of members of France's elite RAID force cordoned off part of the Neudorf area as part of the search. -Sky News
Dozens of police from France's elite RAID counterterrorism unit cordoned off an area of southern Strasbourg on Thursday close to where a gunman who attacked the city's Christmas market was last seen, according to an AFP reporter at the scene.
French officials have not confirmed that the operation is linked to the Tuesday shooting that left three people dead and 13 injured, including one person rendered brain dead.
A massive manhunt has been underway for the suspected shooter, 29-year-old French citizen Cherif Chekatt, as some 720 police and gendarmes have been looking for him nearly 36 hours after the incident at the popular Christmas market just a few blocks from the European Parliament.
Chekatt, who was reportedly wounded in the atack, is said to have commandeered a taxi to make his escape.
French officials issued an "urgence attentat" (emergency attack) alert, which temporarily expands police powers and requires officers to maintain "a higher degree of vigilance," according to the BBC.
The first shots rang out in Strasbourg's city center at around 8 pm local time (1 pm ET). A French prosecutor said the suspect shouted "Allahu Akbar" - 'God is great' in Arabic - during the shooting.
The suspect, Cherif Chekatt, 29, was born and raised in Strasbourg
His activities within the local radical Islamic community raised red flags and he had been added to a terror watch list
He was known as a potential security risk
The 29-year-old was sent to jail by a court in the German town of Singen for a violent robbery in Germany. After serving the sentence, Chekatt, a French national with North African roots, was deported back to France in 2017
He has also spent time in prison in France and is believed to have been radicalized in prison. He has been described as "notorious" to police, with a long criminal record
All told, the public prosecutor said the suspect has been convicted 27 times in France, Germany and Switzerland
Police had intended to arrest Chekatt in connection with an armed robbery hours before he allegedly opened fire on the Christmas market – but he was nowhere to be found when they raided his home. Police did, however, discover a grenade
Investigators are still working to establish a motive in the attack
The suspect fired three separate volleys into the crowds at the Christmas market then engaged twice with patrolling soldiers from Opération Sentinelle, a nationwide security operation established after a series of terrorist attacks in Paris in 2015