Police said there were believed to be "several hostage-takers and hostages inside the bank," and that the driver of a cash transport vehicle was among those being held.
Police wearing helmets and ballistic vests and carrying rifles were seen on a cobblestone street outside the town's bank branch, photos published by the Bild newspaper showed.
It was not immediately clear how many robbery suspects were involved, or what arms they might possess.
According to the Bild newspaper, the occupant of an armoured van was intercepted and threatened in front of the bank in the standoff that started around 9:00 am (0700 GMT) Friday.
The hostage takers and at least one captive were believed to be holed up inside the bank's vault, the report added, without citing a source.
The small town of Sinzig is located just west of the Rhine River, roughly halfway between the cities of Bonn and Koblenz in the state of Rhineland-Palatinate.
Police said there was "currently no danger to people outside the cordoned-off area", adding that they were unable to provide further information for now.
Police were withholding details for "tactical reasons," a spokesperson told news weekly Der Spiegel, as it could not be ruled out that the hostage takers were reading online news reports.
In late 2025, a bank robbery took place in Gelsenkirchen, another city in western Germany, resulting in losses of 30 million euros, according to police.
This is a breaking news story. More details to follow.
