The 42-year-old man was allegedly seen wielding a knife and arguing with a woman when police were called to an address in San Remo on the NSW Central Coast about 5am on Thursday.
Multiple attempts to arrest him were unsuccessful and he got into a car and rammed two police vehicles to flee, police say.
Officers tried to use a Taser while the man was in the vehicle and when he drove at the surrounding police cars, an officer fired once.
"It appears that he was struck by the bullet in the upper arm area," Detective Superintendent Chad Gillies said on Thursday.
"(His) condition is stable, it's certainly not life-threatening."
After escaping despite being shot, the man evaded police for more than two hours before being found in nearby Gorokan about 7.30am.
Police used a Taser and managed to arrest the man on the second occasion, Det Supt Gillies said.
The man, who is known to police, is under guard in hospital.
"I anticipate a number of serious charges will be conferred against that male at the earliest opportunity," Det Supt Gillies said.
The alleged victim of the domestic incident was taken to hospital with injuries including facial fractures and has since been discharged.
The car used by the man to escape has been seized by police and will undergo forensic testing.
No critical incident has been declared and the officers involved acted appropriately in trying to detain the man, Det Supt Gillies said.
"Police were required to act immediately, which they did and put themselves in jeopardy," he said.
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