The member of the Police Department's fugitive apprehension team died of his wounds at a hospital a few hours after the 3:30 p.m. shooting, Police Chief Daniel Garcia said.
The officer's name wasn't immediately released. Garcia said he was a 21-year veteran.
"The other officer is fighting for his life," Garcia said at a news conference. That officer, a nine-year veteran of the force, also hadn't been publicly identified by late Monday evening.
The shootout occurred after the suspect fled in a car, caused a three-vehicle collision, then ran away before exchanging gunfire with officers outside a check cashing and title loan business, authorities said.
"It was obvious that the guy was out of control," said Wayne Monton, who owns a nearby business and witnessed the shooting. "After the crash and the shooting, everybody just took off running. It was chaos."
The suspect came around a corner with a gun and a third officer fatally shot him, Detective James Holmes said.
The suspect's name was not immediately released.
An 83-year-old woman and a 53-year-old man suffered minor injuries in the car crash that closed an intersection for several hours as authorities gathered evidence.
Nick Cusson, the manager of a restaurant in a shopping center near the intersection, said he heard more than a dozen gunshots just a few minutes after arriving at work.
"The next thing you know, the whole parking lot is scattered with people," Cusson said. "Then within about 30 seconds, we see all these cops driving up."
Cusson said he had noticed several unmarked police cars parked nearby just before the shooting but didn't think much of it.
"Then I guess there was a shootout," he said. "We were all looking out the window. We were kind of curious. We weren't sure they were gunshots at first."
Cusson said he was closing his shop because the entire area had been cordoned off by police.
"No one can come pick their food up and we can't get delivery drivers out," he said.