Mehmet Selim Kiraz is in critical condition after a shoot-out erupts between Turkish security forces and hostage-takers.
"Because of gunshots heard from inside the prosecutor's office, our security forces carried out an operation," he said.
He added that police had negotiated with the gunmen for six hours before storming the building.
An unverified photograph that emerged earlier appeared to show Mr Kiraz with a gun to his head and a hand over his mouth - with his hands apparently bound with cable ties.
Sky News has decided not to show an image of Mr Kiraz in distress.
Turkey, had threatened to kill Mr Kiraz at 1.36pm UK time if its demands were not met.
Mr Kiaz had been the prosecutor investigating the death of a teenager who was hit by a police gas canister fired during nationwide anti-government protests in 2013.
A website close to DHKP-C said militants from the banned organisation had given authorities three hours to meet five demands, including forcing policemen held responsible for the teenager's killing to confess.
Deputy Chief Prosecutor Orhan Kapici confirmed the incident was related to Mr Kiraz's investigation into the boy's death.
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