The verdict, at the end of a two- month inquest and after almost two days of deliberations, absolved the police of blame.
Ian Bennett, 34, was hit by three bullets at the end of a 90-minute siege at his flat in Rastrick, West Yorkshire, on New Year's Day. Police officers told the inquest in Bradford that they were convinced the gun was real.
But after the verdict, Mr Bennett's family said in a statement read by Michael Hughes, their solicitor: 'The only comfort which we can derive from the inquest is the fervent hope that the glare of publicity which has surrounded the death of Ian and the actions of the police will lead to an urgent and comprehensive review of police firearms training.
'In our view this tragedy could have been avoided if the police operation had been properly conducted.'
Minutes before Mr Bennett was shot, his parents had arrived at the scene and asked to speak to him, the inquest heard. They told officers that the firearms were replicas, but were not given permission to approach their son.
'We had only been there for 15 or 20 minutes and he was dead,' Jean Bennett, Mr Bennett's mother told BBC Radio 4 after the verdict.
His father, Eric Bennett, had told the inquest that when he arrived on the scene he begged that his wife be allowed to talk to their son - but this information was never passed on to senior officers.
The inquest heard that the siege began when Mr Bennett had a violent argument with a taxi driver after an all-day drinking session. Police arrived to find Mr Bennett brandishing an antique flintlock rifle and later discovered several other imitation guns in his flat.
However, Constable Karl Floyd, who fired the fatal shots, rejected claims that the firearms team had panicked and made crucial errors.
He told the inquest that Mr Bennett had leaned out of a window with 'what I took straight away to be a real shotgun. He pushed it out, brought it up into his shoulder and was aiming up the street.'
He had twice told Mr Bennett to put the weapon down, but 'he leaned further out of the window and aimed at me and PC Smith. I engaged him and started firing shots in order to stop him shooting PC Smith and myself. I did not want to shoot him.'
After the inquest, Bill Hughes, West Yorkshire's Assistant Chief Constable, said: 'There has been much emphasis placed on the fact that he possessed only replica firearms. Police officers who face danger, whether real or perceived, are not blessed with hindsight.' Some local people had told officers that the guns were real, although others said they were fake.
Mr Hughes defended the decision not to allow Mr Bennett's parents to talk to him. Drawing a parallel with the Hungerford massacre, he said: 'One of the first people Michael Ryan shot was his own mother.'
The jurors, who heard evidence from more than 80 witnesses, retired on Friday lunchtime. PC Floyd's solicitor said the verdict had come as a relief.