The shooting followed a dramatic 40-minute chase through the city's west from 1am on Friday when police spotted a car carrying three men suspected over burglaries on businesses.
The group tried to outrun police in stolen cars and on foot before they were boxed in by police cars at a Tullamarine factory.
When a sergeant got out to confront the driver of the driver, he was rammed and pinned to a brick wall.
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"At that point the sergeant has discharged his firearm," Assistant Commissioner Stephen Leane told reporters on Friday.
"We believe there was four shots fired, one of them fatally wounding the man who was driving the allegedly stolen vehicle."
It was feared the sergeant's leg had been broken, but tests have since suggested he may have suffered only bone bruising.
"If that is all he got, he's been very, very lucky," Mr Leane said, adding the officer would have feared for his life.
A second officer had suffered a hand injury during the drama.
Police will not release updates on the condition of the injured officers.
The remaining two suspects, aged 18 and 22, were nabbed after they tried to flee following the shooting but their getaway car got bogged.
Chief Commissioner Graham Ashton says his officers have been subject to increased violence in recent years.
"We've had members driven at ... and we had a young policewoman slashed in the face with a screwdriver the night before last (on Wednesday)," Mr Ashton told 3AW on Friday.
"We've had absolutely reckless behaviour by members of the community not showing any respect for law and order ... and authority."
In a separate incidents, another officer fired his gun on Thursday night at another stolen vehicle that rammed a police car in Berwick.
The vehicle was driven off and dumped in Rowville. It's believed the driver was injured in the incident and he has not been found by police.
Homicide squad detectives, the coroner and the professional standards command are investigating Friday's fatal shooting.
