Police were chasing the three suspects in relation to an alleged burglary in the western suburbs.
The trio fled from police in a car before abandoning the vehicle in an industrial area in Tullamarine, and running across a field and into a factory.
With the assistance of a PolAir helicopter and the dog squad, police tracked them down.
They allegedly stole at least two vehicles from inside the factory in a bid to evade police, and one suspect was isolated by a sergeant in a police car.
The sergeant got out of the car and was then pinned against a wall by one of the stolen vehicles.
“The offending vehicle has pinned the sergeant against a brick wall,” Mr Leane said.
“At that stage the sergeant has discharged his firearm. We believe there was four shots fired, one of them fatally wounding the man who was driving, what we say was a stolen vehicle, at that time.”
Local man Rocco Sorace was sleeping at a nearby factory as the confrontation unfolded.
“I heard the police coming in, the helicopter is on top of the factory, roughly, and I heard … loud bangs,” Mr Sorace said.
Two police officers were taken to hospital after the incident, with one sustaining an injury to his hand, another an injury to his leg.
“We thought the sergeant was seriously injured, we thought he may very well have a broken leg, but we’ve had some good news,” Mr Leane said.
“We are waiting for some x-rays but it may be he’s got some severe bone bruising.
“If that’s all he’s got he’s been very, very lucky.”
Two men, aged 18 and 22, fled the scene in a stolen vehicle, but were arrested a short time later and are now in police custody.
The Homicide Squad and Professional Standards Command continue to investigate the incident.