The incident occurred outside the Ukrainian embassy in Holland Park, Kensington, at around 8:30.
Police said they had been called following reports of a car in collision with a number of parked vehicles near the Ukrainian Embassy.
Upon arrival, a car, believed to be a silver Mercedes, was driven at the officers which resulted in firearms and a Taser being discharged.
A man in his 40s was arrested and taken to a central London hospital. He was uninjured.
A spokesman for the Ukrainian embassy said an unknown vehicle had crashed into the car used for official duties by Natalia Galibarenko, the Ukrainian Ambassador, and the man inside posed a threat that required British police to fire an unknown number of shots at the car.
Contrary to some early reports in the media, the spokesman said no shots had been fired from the car.
The Embassy spokesman knew of no motive for the attack and did not know the nationality of the arrested man. He said the embassy had not been threatened in recent weeks. All members of the embassy were reported as safe.
Reports on social media suggested up to ten shots were fired.
A press statement from the embassy said the Ambassador's car had been "deliberately rammed as it sat parked in front of the Embassy of Ukraine's building.
"The police were called immediately and the suspect's vehicle was blocked up.
"Nevertheless, despite the police actions the attacker hit the Ambassador's car again. In response the police were forced to open fire on the perpetrator's vehicle.
"The culprit was apprehended and taken to a police station."
A Metropolitan Police statement said that officers had been called at around 08:30 on Saturday morning and "as part of the protective security arrangements for London, armed and unarmed officers were deployed".
Chief Superintendent Andy Walker, from the Met's Specialist Firearms Command, said: "As is standard procedure, an investigation is now ongoing into the discharge of a police firearm during this incident.
"While this takes place, I would like to pay tribute to the officers involved this morning who responded swiftly to this incident and put themselves in harm's way, as they do every day, to keep the people of London safe."
The incident is not being treated as terrorist-related.
The Directorate of Professional Standards has been informed and police cordons remain in place.
