A high-speed police chase involving a stolen black Mercedes SUV caused chaos across the Kiama and Gerringong region on Thursday morning, narrowly avoiding multiple collisions with local residents and holidaymakers.

The incident began around 10am when witnesses reported the car speeding dangerously along South Kiama Drive to police.

Police have arrested the alleged driver of a vehicle stopped near the Shellharbour Junction Railway Station and he and a passenger attempted to flee on foot.

One of the police cars chasing the black vehicle.

With concerns over the two people going onto the tracks, trains on the South Coast line paused their morning services.

Police arrested a 24-year-old man just before midday after a search involving the dog unit.

The vehicle reached speeds well in excess of 100km/h, weaving through traffic and narrowly avoiding several head-on crashes and near collisions.

A local motorist has shared dashcam footage with The Bugle which shows the car overtaking other vehicles as it made its way north along South Kiama Drive with several police cars in pursuit

One local shared on social media" "My sister nearly had a head-on as the car was coming in the wrong direction at crazy speed."

Another said: "Almost got sideswiped in front of Top Shop ... so scary. Don’t know how it didn’t cause a head-on collision."

Many residents reported hearing multiple sirens and seeing police vehicles in pursuit.

One witness said: "He almost had a number of head-ons. Speeds in excess of 100 km/h."

The chase ended when police successfully intercepted the vehicle on the northbound off-ramp at Shell Cove.

Several community members expressed relief that the dangerous situation ended without harm, with one commenting: "Thank goodness this has ended safely."