Police allege the "enraged" man, named in media reports as Comancheros bikie associate Liam Scorsese, arrived at the home at Goulburn Street at Wakerley before 10am on Sunday, armed with the knife.

He and tried to break in, threatening the terrified occupants who were known to him.

The residents phoned police and two officers tried to Taser the man before retreating 50 or 60 metres down the street.

But the 31-year-old followed the police and threatened them, resulting in one of the officers firing two shots at him.

"He was armed, he has threatened police and as a result of those threats one officer has fired two shots," Detective Chief Superintendent Mick Niland told reporters.

"Police were in fear of their lives at the time."

The officers and a neighbour performed CPI on the man before paramedics arrived.

He was taken to the Princess Alexandra Hospital in a critical condition and subsequently died.

Neighbours recalled hearing "hysterical" shouts before the shots rang out and described the neighbourhood as a usually quiet place.

The Queensland Police Service's Ethical Standards Command has launched an investigation into the incident on behalf of the State Coroner, with the assistance of the Crime and Corruption Commission.

Chief Supt Niland said the incident was "traumatic" for both the family and the police involved and the officers were receiving counselling.

It is the second shooting incident involving Queensland police in less than two weeks, after a 16-year-old boy was shot after allegedly lunging at officers with a knife at Springfield, southwest of Brisbane on February 14.

He was later charged after being released from hospital after treatment for non-life threatening injuries.

Australian Associated Press