The death marks the second year in a row that police have killed an unarmed bystander while responding to celebratory gunfire on New Year's Eve.
Abel Isaac, 33, who died Monday, was inside a home in the city's Germantown section when an officer opened fire outside at a man who had been shooting into the air, Deputy Commissioner Richard Ross said Tuesday.
The patrolman said he opened fire when the gunman - who was near the closed front door - pointed his gun at him, Ross said.
The officer fired 11 times, with bullets striking the suspect outside and three people inside the home, including Isaac, the only one critically wounded.
"It's just a tragedy. There's no other way around it," Ross said. "By all accounts he was an innocent victim."
The officer felt threatened by the alleged gunman, Dontate Mitchell, 21, police said. But his partner, perhaps because of his vantage point, cannot corroborate that Mitchell aimed a gun at police, Ross said.
No gun was found, although slugs were found nearby that do not match the officers' weapons.
The patrolman who fired was placed on administrative duty while the shooting is investigated.
At least 30 friends and family members were at the New Year's party, counting down the seconds to midnight, when the shots ripped through the house. Mayhem ensued as parents tried to protect their children and some of the bloody victims sought safety upstairs, partygoers have said. One 9-year-old boy suffered a graze wound.
Isaac, a married hospital worker, was shot in the face and was in a medically induced coma until his death at Albert Einstein Medical Center.
A year ago, police fatally shot Bryan Jones, 30, an unarmed man who was running away from midnight gunfire on New Year's Eve.
"Unfortunately, from a year ago until today, the city still has a policy and procedure that's causing injury to its citizens," said Bruce Ginsberg, an attorney for the Jones family, who are preparing to sue the city.
The local Fraternal Order of Police does not plan to comment on the latest shooting while it remains under investigation, Vice President John McGrody said.
Despite a campaign by District Attorney Lynne Abraham to end the tradition of firing guns into the air, city police received 247 reports of gunfire in a four-hour period on New Year's Eve.
City police also shot an armed man in the leg during another incident that night.
"When an officer is confronted by someone with a gun, sometimes they (the suspects) lay it down, and sometimes they're adversarial ... and an officer is within his right to react," said Sgt. Ray Evers, a police spokesman.
In the past five years, the number of fatal police shootings has ranged from a low of seven in 2005 to a high of 22 in 2006, the department said.
Former police Commissioner Sylvester Johnson, who retired Friday, defended his department's training and use of force at a news conference last week in which he stressed that seven officers had been shot last year, one fatally.
The new police commissioner, Charles Ramsey, has pledged to address the issue. He has said that shootings by police fell 77 percent during his tenure as chief in Washington, D.C.
