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Residents living near the Hangzhou Safari Park, which did not inform the public for a week that the leopards had escaped, spotted the wild cats last week and alerted authorities, according to an announcement from the Fuyang District government.
Surveillance footage posted online showed one of the leopards walking near the upscale Jinyuan Villa area east of the park on Friday.
Search teams were dispatched, and two of the leopards were recovered, the local government said in a statement.
Now a massive hunt has been launched for the third, with officials and locals searching on foot and by drone.
It was not until the search was already underway, and seven days since the animals were reportedly first spotted, that the park officially notified the public. According to state-backed The Paper, park staff had initially denied reports any leopards had escaped.
In a statement Saturday, the zoo said it was "sincerely sorry" for not alerting people sooner, adding: "We were worried that the announcement of the incident would cause panic." The statement said administrators felt as the leopards were all juveniles, there was little risk, but added it was a mistake and "we sincerely accept the criticism" made by the public.
The Hangzhou Safari Park has been closed while local authorities investigate. The person in charge of the park was taken into police custody.
It remains unclear how the leopards escaped. Concerns over poor conditions and lax safety standards at Chinese zoos have been raised in the past, such as last year, when a worker at Shanghai Wildlife Park was mauled to death by a bear in front of customers passing through a safari area.
Opened in 2002, the Hangzhou Safari Park houses more than 200 animal species, including pandas and elephants. The leopards were kept in its Dangerous Predator Zone.