Police are currently investigating sightings of a large cat in fields off Earls Hall Drive at around 7pm on Sunday (August 26), reports BBC News.
Members of the public have been told to stay indoors while police continue to search the area.
Essex police officers are working with Colchester Zoo experts, who have stated that the reports are genuine after they were shown a photograph by a witness.
Armed police are now being sent into the area, alongside uniformed police officers.
A police helicopter is also searching the area where it has been sighted. People are advised to call 999 if they see the animal.
Colchester Zoo have confirmed that none of their animals have escaped, and are investigating where the lion could have come from.
Last year, a lion sighting caused long train delays in West Yorkshire.
An escaped 8ft tiger spotted on a roof in Texas earlier this year turned out to be a stuffed cuddly toy.