Some of the children reportedly hid during the attack which took place at a school in the outskirts of the capital Helsinki.
A 12-year-old child has died after being wounded in a shooting at a school in Finland.
The suspected attacker, also aged 12, has been detained and taken into custody. Police also said they have the weapon.
Officers were called to the incident at Viertola school in Vantaa just after 9am local time on Tuesday.
Two other pupils aged 12 were also shot and seriously wounded, police chief Ilkka Koskimaki told reporters, and were taken to hospital.
The victims and the suspect were apparently from the same class, Finnish broadcaster MTV Uutiset reported.
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The school has two sites, Liljatie and Jokiranta. The shooting took place at the Jokiranta campus.
Emergency services - including armed police officers - responded.
Some of the children reportedly hid during the attack, while others who had been contacted by their parents on mobile phones said they saw what happened.
"The immediate danger is over," said the school's principal Sari Laasila.
Anja Hietamies, the mother of an 11-year-old pupil, told Reuters news agency she received a message from her daughter after the shooting.
"She said they were in a dark, locked classroom, not allowed to speak on the phone but could send messages," she said, adding her daughter was scared.
Prime Minister Petteri Orpo said the shooting was deeply shocking.
"My thoughts are with the victims, their loved ones and the other students and staff," he said on X.
"The day started in a horrifying way. There has been a shooting incident at the Viertola school in Vantaa. I can only imagine the pain and worry that many families are experiencing at the moment. The suspected perpetrator has been caught," interior minister Mari Rantanen posted on the social media platform.
The suspect was arrested at around 10am in the suburb of Siltamaki - a 50-minute walk from the school.
A witness told MTV Uutiset police stopped a young person - who dropped an object that looked like a weapon on the ground.
Footage on social media showed two officers kneeling at the side of the suspected attacker, who was lying face down on a pavement.
Police said the suspect had admitted carrying out the attack in a preliminary interview, but the motive is not yet known.
The permit for the handgun belonged to a relative of the suspect, police added.
The school, situated on the outskirts of the Finnish capital Helsinki, has around 800 students from first to ninth grade - aged seven to 16.
Local residents have been asked to stay away from the school which has been cordoned off by police.
Previous school shootings in Finland have led to the country tightening its gun legislation.
In 2007, Pekka-Eric Auvinen shot and killed six students, the school nurse, the principal, and himself using a handgun at Jokela High School, near Helsinki.
Matti Saari, another student, opened fire at a school in Kauhajoki, in northwest Finland, in 2008. He killed nine students and one male staff member before turning the gun on himself.
In 2010, Finland introduced an aptitude test for all firearms licence applicants - and set a new minimum age of 20, up from 18.
There are more than 1.5 million licensed firearms and about 430,000 license holders in the country, according to the Finnish interior ministry.
Hunting and target shooting are popular in the Nordic nation of 5.6 million people.
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