Police have bailed two suspects in Ipswich after reports there were men carrying a handgun through the town.

Police received multiple reports of men carrying a handgun in Ipswich. In one, received just after 10.45am Sunday, a member of the public said she had seen two men in Eagle Street with what appeared to be a gun.

An immediate response was sent including an armed response unit. Police located two men and they were detained.

The 21-year-old man and 22-year-old man both from Ipswich were arrested on suspicion of possession of an imitation firearm with intent to cause fear of violence.

They have since been bailed, pending enquiries, to return to police on March 21.