The duo were both seriously wounded with one man fighting for his life after police responded to reports of a stolen car at Wentworthville, in Sydney's west, on Friday afternoon.
Penrith state MP Karen McKeown later confirmed a car belonging to her husband had been stolen on Thursday night, when intruders broke into her house.
Ms McKeown and her husband were home when the burglars broke in, but did not realise they were there until later.
Acting Assistant Commissioner Paul Dunstan said police entered the car park, based on information from the stolen car's tracker, at about 12.10pm.
"They found a locked garage door with a car inside … as they've opened that garage door, the vehicle has immediately accelerated towards them," he said.
"As a result, police drew their firearms and were required to fire a number of shots."
Ms McKeown, who helped police find the alleged offenders using the in-car tracker, praised the authorities for their response.
"While I am shaken from the events, thankfully I am unharmed," she said in a statement.
Police located the stolen car thanks to a tracking device. (Steven Markham/AAP PHOTOS)
"Political leaders often praise police for their bravery.
"Today, I have had a first-hand experience of this."
Hours later, a strong police presence remained at the scene of the confrontation, as authorities checked the leafy suburban neighbourhood for evidence.
Police said the incident at the Labor MP's house in Leonay, in Sydney's west, was being treated as an aggravated break and enter.
After the shooting, the two injured men were taken to Westmead Hospital.
The police shooting will be subject to an independent review. (Steven Markham/AAP PHOTOS)
One is reported to be in a critical condition with gunshot wounds to the neck.
The other is in a serious but stable condition after being clipped in the leg.
No police were harmed.
The investigation of the incident will be subject to an independent review with oversight from the NSW police watchdog.
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