The police are now "sterilising the building from basement to top", spokesman Iqbal Kabid told journalists saying that the skirmish between security forces and terrorists was taking place in the cinema located in the same building as the attacked Starbucks cafe.
He added that the police were going to declare "the situation secure soon".
Earlier in the day, at least six people were killed in a series of explosions in the Indonesian capital after around 10-15 gunmen entered the downtown area on motorcycles, carrying rifles and explosives.
"At 10:50 am [03:50 GMT] there was an explosion in front of Sarinah [mall]," Jakarta metropolitan police said via Twitter.
One of the explosions occurred outside the United Nations building in the city center.
According to reports, there have been a total of six blasts in Jakarta, one of them apparently carried out by a suicide bomber.
Photographs of the scene of the explosion outside the Sarinah shopping center, posted by the city police on Twitter, show three bodies lying on the ground.
At least six people were reportedly killed.
There also have been multiple reports of gunfire and at least one active shooter on the scene.
An ABC journalist reported that the attackers came in on motorcycles throwing grenades.