The shooter was still inside the school along with some students who had not managed to escape, said Heidi Hagman, assistant to the Tuusula municipality director.
She said the man had shot four people, and that "one of those shot is probably the principal."
Police confirmed the shooting at Jokela high school in Tuusula, some 50 kilometers (30 miles) north of the capital, Helsinki, but said they could not give details and did not confirm the fatality.
"The situation is under control," said police spokesman Tero Haapala, adding that "there is no danger to outsiders now."
Kim Kiuru, a teacher at the school, said the principal announced over the PA system just before noon (1000GMT) that all students should remain in their classrooms.
"I stayed in the corridor to listen to more instructions having locked my classroom door," Kiuru told the YLE radio station. "After that I saw the gunman running with what appeared to be a small caliber handgun in his hand through the doors toward me after which I escaped to the corridor downstairs and ran in the opposite direction."
Kiuru said he saw a woman's body as he fled the building.
"Then my pupils shouted at me out of the windows to ask what they should do and I told them to jump out of the windows ... and all my pupils were saved," Kiuru said.
Finnish media said the shooter revealed his plans in a YouTube posting before the attack.
A YouTube video titled "Jokela High School Massacre" showed a picture of a building by a lake and two photos of a young man holding a hand gun. The person who posted the video was identified in the user profile as an 18-year-old man from Finland.
The profile contained a text calling for a "revolution against the system."
Police could not immediately be reached to comment on the video.
The Ilta-Sanomat newspaper initially reported three people were killed, but later said only one victim had died.
It was the first reported incident of a shooting at a Finnish school, where previously violent incidents usually involved knives but had never resulted in death.
More than 400 students aged 12 through 18 were enrolled at Jokela, Hagman said.
Prime Minister Matti Vanhanen described the situation as "extremely tragic" and said the government would hold an emergency meeting.
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