Police were called to a stabbing at a home at Hillside, in Melbourne's northwest, just before 7am on Friday, where a 61-year-old man was found with critical injuries on the front lawn.
He was given CPR but died at the scene.
Detective Inspector Dean Thomas said officers heard a woman screaming inside the house and and went to investigate.
"It was a very confronting, distressing scene for our members to turn up to; it was clearly obvious that (the 61-year-old) had been assaulted," he told reporters on Friday afternoon.
Police arrived at the Hillside address to find a 61-year-old man with critical injuries on the lawn. (Joel Carrett/AAP PHOTOS)
The deceased man's stepson, aged in his 30s, moved towards officers armed with a weapon, believed to be a knife or axe, despite requests from them that he drop it.
An officer fired one shot inside the house before the armed man went outside and stabbed the tyre of a police vehicle.
The man again moved towards police who fired several shots, Det Inspector Thomas said.
"This offender was very, very capable of causing serious injury to anybody and hence (the officers) maintained their distance and did everything they could to avoid a confrontation with them resulting in a shooting," Det Insp Thomas said.
"But unfortunately, this male has advanced on the member (of police) and the member has fired a number of shots.
"From what I can see from the body-worn cameras they've acted bravely and they've done everything they could."
Up to a dozen other police officers turned up at the property after neighbours raised the alarm. (Joel Carrett/AAP PHOTOS)
The stepson was shot in the lower body and is under police guard in hospital in a critical but stable condition.
His sister who was at the home is receiving medical treatment.
Det Insp Thomas said detectives were treating the stabbing as a family violence incident.
The stepson did not live at the home and had unexpectedly turned up that morning and had an altercation with the 61-year-old, he said.
The stepfather's injuries have not been made public.
Detective Inspector Dean Thomas said police who arrived at the 'confronting' scene acted bravely (Joel Carrett/AAP PHOTOS)
Det Insp Thomas said the stepson was known to police and may have had "some psychiatric history" but he did not provide further details.
Several neighbours called police and up to a dozen other officers arrived on the scene.
The two officers involved were giving statements and undergoing mandatory drug and alcohol testing at a nearby police station.
The armed crime squad and professional standards command will investigate the shooting, standard practice when officers fire guns.
Lifeline 13 11 14
beyondblue 1300 22 4636
1800 RESPECT (1800 737 732)
29°C