The incident occurred on Wednesday afternoon after officers began pursuing a vehicle that was driving recklessly on Interstate 95, said a statement from the Indianapolis Metropolitan Police Department (IMPD).
The dead man, later identified by family as 21-year-old Sean Reed, began filming the police chase whilst behind the wheel of a vehicle that was speeding.
More than 3,000 people watched the incident being broadcast live on Facebook on Wednesday, before the footage was further circulated on social media.
IMPD officers pursued Mr Reed’s vehicle down an exit ramp, before giving chase on foot.
Police said that the driver brandished a firearm at the scene, and exchanged fire with a IMPD officer before he was shot dead at around 6:15 p.m.
In the video, Mr Reed is believed to be behind the camera as he pulled the vehicle over near West 62nd Street and Michigan Road, where the shooting occurred on Wednesday.
IMPD officers can be heard in the video shouting “'Stop! Stop!” as the 21-year-old runs from the parked vehicle.
Mr Reed then appears to respond with “F*** you” before a series of gunshots are heard and he falls to the ground.
His phone, which was still broadcasting, also falls to the ground, with the camera showing upwards.
One Facebook Live viewer commented “omfg”, while another typed “man wtf”.
At one point, almost 16,000 people were watching the Facebook live, the IndianapolisStar reported.
IMPD police did not confirm whether the man in the video was Mr Reed, but his family identified him from the video as more than 100 people protested at the scene on Wednesday night.
In a statement, police said the shooting was now under investigation.
It said: “While we are withholding judgment on the actions of the involved officer at this time, the officer has been placed on administrative leave pending further investigation. The shooting is being investigated by IMPD’s Critical Incident Response Team.”
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies