The officers told investigators that they feared for their lives during the December 2014 stop of 36-year-old Jerame Reid, according to a statement from the Cumberland County Prosecutor's Office.
The officers had arrested Reid in August 2014 on charges of resisting arrest and knew he had served about 13 years in prison after being convicted as a teenager of shooting at state troopers, investigators said.
Screaming repeatedly "Don't you f---ing move!" and "Show me your hands!" at Reid, who was sitting in the passenger seat, Officer Braheme Days reached into the car and removed a handgun.
"I'm going to shoot you!" Days shouts, at one point addressing Reid by his first name. "If you reach for something, you're going to be f---ing dead."
Days tells his partner, "He's reaching for something."
Faintly on the video, Reid can be heard telling the officer: "I ain't doing nothing. I'm not reaching for nothing, bro. I ain't got no reason to reach for nothing."
The video shows Reid getting out of the car with his hands up, but Days - who was holding both his service weapon and the recovered gun - told investigators that he believed Reid "had a weapon or was planning to take the handgun(s) out of his hands."
The statement from prosecutors said Days "perceived that he and his partner were in imminent danger" and that his partner, Officer Roger Worley, "likewise believed that his partner was in imminent danger."
Prosecutors say Days fired seven shots and Worley fired once. The shooting lasted approximately 2 seconds and Reid was hit in the chest and left arm, according to prosecutors. Days is black, Worley is white and Reid was black.
Bridgeton's mayor told Action News he accepts the outcome and continues to call for peace.
"I'm going to still stand behind our police department and the process that came through," said Mayor Albert Kelly. When asked if he thought it was a fair process, Kelly said "I have to trust our grand jury."
The shooting led to protests in Bridgeton, with Reid's family among the protesters. His stepdaughter told Action News her family has no comment about the grand jury's decision.
The police have issued a statement saying "With the utmost respect for the family of Jerame Reid, the department, as a whole, has supported and will continue to support the actions of the officers since the night of this tragic incident."
Mayor Kelly says it's time for healing.
"I hope it puts a period at the end of this sentence. In some people's minds it will be. Others, who were hoping for a different outcome, will be upset," Kelly said.
Reid's family has hired a lawyer to prepare a civil lawsuit. Both officers remain on administrative leave.
The Associated Press contributed to this report.