The incident took place just after 8 a.m. Sunday in a Safeway store in the north Surrey community known as Whalley, just blocks from the Independent Investigations Office.
Local TV news coverage showed the store behind yellow police tape, RCMP and Transit Police cars in its parking lot and paramedics wheeling a person on a stretcher to a waiting ambulance.
Kellie Kilpatrick, an IIO spokeswoman, said the RCMP received a complaint about a disturbance inside the store, but Transit Police responded.
"Prior to the RCMP arriving at the store, the male made his way inside," she said. "There he was challenged by Transit Police and those officers were the ones that fired their sidearms and this resulted in the affected person sustaining serious injuries and eventually not surviving those injuries."
Kilpatrick said she couldn't confirm reports that a man had stabbed himself inside the store.
"I can't confirm that right now but certainly it's information that has been provided to us," she said. "It's critically important to our investigation that we obtain independent verification."
Calls placed with Safeway and Transit Police were not returned.
Kilpatrick said the store enacted its emergency protocol and locked down the building, which meant investigators with the agency could interview as many as 20 staff and customers.
"The store had a significant amount of video so we're hoping to review that as soon as possible," she said.
She said two officers were involved in the incident but to her knowledge they haven't been interviewed yet.
Agency investigators speak to independent civilian witnesses first and then speak with officers who were witnesses before interviewing police who were directly involved in incidents, she said.
The agency will also be working with the B.C. Coroners Service to confirm the man's identity and notify his family.
The shooting marks the second time the police watchdog has responded to incidents in the region.
Investigators responded Friday night and Saturday in Abbotsford to the scene of a fatal traffic accident between a teenage pedestrian and an off-duty police officer who was driving his own car.
Whalley has had a rough reputation for decades but is in the midst of a revitalization effort by the city.
The neighbourhood around the Safeway store now boasts a Simon Fraser University campus, a new library and City Hall, as well as several residential towers.
--by Keven Drews in Vancouver