Firearms officers were deployed to an address on Tennyson Green at around 11.30pm on Tuesday, 24 January following reports of two males with a firearm.
The men, aged 20 and 23, were arrested on suspicion of possessing a firearm without a certificate. They remain in police custody.
The Richmond School in Skegness was closed while the incident was ongoing due to its close proximity to the incident.
A police presence remained at the scene during the morning and businesses were informed due to the expected traffic disruption in the area.
Officers are expected to stay in the area for the majority of the afternoon and would urge the public to speak to them if they have any concerns.
Lincolnshire Police would like to thank the community for their support while the incident was ongoing.