A 95-year-old great-grandmother is reportedly fighting for her life after being tasered by police when she was found with a knife in a NSW nursing home.

Clare Nowland was standing next to her walking frame and holding a kitchen knife when aged care workers at the Yallambee Lodge near Cooma called police in the early hours of Wednesday morning, according to multiple media reports.

Police confirmed the elderly woman sustained injuries during an interaction with officers before she was taken to hospital.

"The 95-year-old woman was taken to Cooma District Hospital where her condition is being monitored," NSW Police said in a statement.

Officers struggled to disarm the woman before pulling out their tasers and firing at her back and chest, reports said.

Ms Nowland, who has dementia, collapsed and sustained critical injuries during the incident.

According to NSW Police guidelines, an officer can use a stun gun when violent resistance is occurring or is imminent or when an officer is in danger of being overpowered.

The Snowy Monaro Regional Council, which runs Yallambee Lodge, said staff followed procedure during the incident.

"Council are supporting our staff, residents, and families during this difficult time," it said in a statement.

NSW Police said a critical incident investigation had been launched to examine the responding officers' actions. The investigation will be subject to independent review.

Yallambee Lodge is a 40-bed facility designed for people who can no longer look after themselves in their own homes, according to the council's website.

NSW Council for Civil Liberties president Josh Pallas said police should not be using stun guns on vulnerable people who were experiencing dementia or a mental health crisis.

"Surely, there must be more appropriate ways to deal with non-compliant people who are suffering," he said.