Gunfire and blasts were heard at the compound in the Westlands District of the Kenyan capital, which houses the DusitD2 hotel as well as offices.
The Somalia-based militant group al-Shabab claimed it was behind the attack.
People, some with bullet wounds and covered in blood, were escorted out of the building by heavily armed police.
The attack began at about 15:00 local time (12:00 GMT). Kenyan media say the gunmen arrived at the complex by car, shot their way past guards, threw bombs at vehicles in the car park and entered the building.
A woman working in a neighbouring building told Reuters, “I just started hearing gunshots and then started seeing people running away raising their hands up and some were entering the bank to hide for their lives.”
Police then rushed to the scene. One officer told the BBC’s Ferdinand Omondi at the scene, “Things are not good. People are dying.”
Kenyan police chief, Joseph Boinnet, told reporters, “Armed criminals are holding up in the hotel and specialist forces are currently flushing them out.”
The number of victims is unclear. One photographer for Agence France-Presse reported five bodies slumped over tables on a restaurant terrace in the complex.
Kenya has seen a number of terror attacks in recent years, most notably in areas close to the Somali border and in the country’s capital.
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