Police said a citizen called them about a possible impaired driver at about 9:30 p.m. Monday.
They said two officers pulled over a vehicle on the city's east side and shots were fired during a "confrontation with the members."
The Alberta Serious Incident Response Team, which looks into police-involved shootings, said the 31-year-old driver had a sawed-off shotgun when he and police got into an altercation.
Executive director Susan Hughson said Tuesday that the male driver died at the scene, and the shotgun was recovered.
An autopsy is scheduled for Wednesday. Hughson said the injured officer remains in hospital and is expected to make a full recovery.
ASIRT said its investigation continues and no other information will be released.
Edmonton police Chief Rod Knecht told reporters that the wounded officer, who has been on the city force for eight years, has a non-life-threatening injury to his lower body.
"I visited with our member at hospital. He is heavily sedated but is in good spirits and appears to be doing well."
Investigators have not released the dead man's name. No other officers were hurt.
Knecht said stopping vehicles is one of the most dangerous aspects of an officer's job.
"When we stop a car, such as in this type of situation, you don't know who's in the vehicle and what they have been doing, or what they're planning on doing. This is just another example of a simple traffic stop that turns into something."