The incident was reported near a Double Tree Hotel on Route 59 around 5:30 p.m.
Two men were arrested amid the ongoing federal investigation involving gun charges and one gun was recovered at the scene.
One suspect is stable after being shot in the leg and shoulder.
A second suspect was detained and is in custody.
Despite initial reports the shooting involved a drug suspect, police say the arrest warrant was for gun charges.
It is unknown if the suspects fired a weapon at agents involved in the arrest.
No officers were injured in the incident.
Officials with the hotel released the following statement:
"The DoubleTree by Hilton Hotel Nanuet and we are cooperating fully with local authorities. The wellbeing, safety and security of our guests and Team Members are of paramount importance, and we will continue to make every effort to ensure all practice."
The investigation is ongoing.
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