Two suspected gunmen have been arrested after an Australian man was shot dead and another injured during a violent break-in at a Bali villa.

Indonesia’s Police General Listyo Sigit Prabowo confirmed the arrests on Tuesday afternoon, three days after two masked gunmen allegedly stormed Villa Casa Santisya in Munggu, in Bali’s Badung Regency, in the early hours of Saturday.

Speaking during a visit to Jembrana in Bali’s west, Prabowo said both suspects were still being questioned.

Know the news with the 7NEWS app: Download today

“One person is already in Jakarta and one person is on his way to Jakarta from abroad,” he said.

Melbourne father Zivan Radmanovic, 32, was fatally shot in the bathroom, as his wife, Jazmyn Gourmdeas, reportedly hid under the covers in bed.

The attackers then forced their way into the neighbouring room, where 34-year-old Melbourne man Sanar Ghanim was staying with his wife.

Ghanim was shot multiple times and rushed to hospital in a serious condition.

Police later recovered 17 bullet casings, two intact bullets, and 55 projectile fragments from the scene.

Witnesses said the gunmen spoke with strong Australian accents and were wearing a bright orange jacket and a green jacket.

The pair fled the scene on motorbikes.

Prabowo’s announcement came a day after reports surfaced that one suspect had been taken into custody early Monday morning, a claim that was later retracted by Bali police.