Police will allege a group of men, armed with knives and a firearm, entered a business in Berkeley and threatened the employees about 3.15pm on Tuesday.

The men allegedly stole cash before they fled the scene in a grey sedan.

No one was injured.

Lake Illawarra Police Inspector James Dark praised the attendant's actions.

"He has done well and not challenged." he said.

"When a firearm or knife is involved we don't want anyone to be injured.

"It is an extremely violent crime, not just for the shop assistant but also witnesses walking past.

"To see that happen is certainly frightening."

Following extensive inquiries, Lake Illawarra police attended a home in Warwick Street, Berkeley shortly after 6.30pm.

Lake Illawarra Police Inspector James Dark said police received information that the suspected getaway vehicle was located in the rear of a yard.

"Perimeters were set up, a search warrant was applied for and we also also called in tactical police and negotiators," he said.

"It was a contain and negotiate scenario. Police secured the area and maintained the perimeter."

A 22-year-old man was arrested as he allegedly attempted to flee the property, police said.

With the assistance of police negotiators, two men, aged 32 and 35, exited the property and were also arrested about 10.30pm.

During a subsequent search of the property, police allegedly located a pistol and knives believed to be used in the armed robbery.

All three men were taken to Lake Illawarra Police Station.

Two of the men - aged 22 and 35 - were charged with robbery armed with a dangerous weapon.

The 32-year-old man was charged with robbery armed with a dangerous weapon and possess prohibited drug. He was also charged with outstanding warrants relating to firearm offences and an aggravated break and enter.

All three were refused bail and are due to face Wollongong Local Court on Wednesday.

Insp Dark said a trail bike located by police near the scene was not involved in the alleged crimes.