Seven people, including four children, have been shot dead in the early hours of Friday morning, near the Margaret River area, some 270 km south of Perth in Western Australia.

Western Australian Police Commissioner Chris Dawson said officers were called to a property in a small town called Osmington at 05:15 (AWST), were they made the gruesome discovery.

"The loss of any life is tragic, four children and three adults, this is a significant tragedy," he said.

"It appears that gunshot wounds are there but I don't want to go further than that as two firearms have been located at the scene."

At this stage, no further details about the identity of the victims have been released, however police did confirm they are not looking for a suspect.

Detectives from the State's Homicide Squad and Forensic Crime Scene Unit believe the tragic incident is likely to be a murder-suicide, making it the worst mass shooting in Australia since 1996, when a gunman killed 35 in the Port Arthur Massacre.