The panel determined the officer was justified in firing at 18-year-old Derreck Mack in December.
Police were chasing Mack as part of an undercover drug operation that targeted the Stanley Holmes Village Apartment Complex.
The Atlantic County Prosecutor's Office says the officer fired three times, fearing Mack was about to shoot him. Mack was shot twice in his upper back torso.
Police recovered a loaded .45-caliber semi-automatic pistol 5 feet from where Mack fell.
A second suspect surrendered to police.