Before police arrived, the suspect had shot one person who remains in the hospital in critical but stable condition.
It happened on Sunday night near the intersection of Senter and Coyote roads around 9:30 p.m.
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Police say the suspect had been shooting into the air randomly, both inside and outside of a restaurant, and blew out a nearby 7-Eleven's front windows.
"I got scared myself because when he was shooting, it was so strong that I had to cover my ears," Jose Rodriguez, a San Jose resident said.
By the time police arrived on scene, acting San Jose Police Chief Paul Joseph says, the suspect still had a gun in his hand.
"The suspect was still armed with his stolen .45 caliber semi-automatic handgun that he raising above his head," Chief Joseph said. "Officers attempted to de-escalate the situation giving the suspect commands to drop his weapon. But the suspect did not comply."
Chief Joseph says the suspect then pointed his gun at officers causing four officers to shoot him.
Each of those officers has at least three years of experience.
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The suspect was taken to the hospital where he later died.
Rodriguez was helping out at the restaurant when the shooting happened.
"I heard when they asked him to 'drop the gun, drop the gun,' but that's it because I was back there in the restaurant with the girls, the waiters and the cook to try to make them calm down," Rodriguez said.
He says while he didn't personally know the suspect, the man was a regular at this shopping center.
Chief Joseph says he had been drinking at the restaurant earlier that day.
"We're learning the suspect had estranged himself from his family, was drinking heavily and had made comments regarding suicidal ideations," Chief Joseph said. "By all accounts, we believe the suspect was determined to have an armed confrontation with police and unfortunately shot a bystander during his self-created melee."
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San Jose Mayor Matt Mahan said he's grateful for the swift actions of officers that may have saved lives.
"I believe that the reason that this was not a much worse tragedy than it already is, is because our officers responded quickly and courageously and did what they needed to do to ensure the safety of others who were there," Mahan said.
No officers were hurt in this incident.
This is the fourth police shooting of the year for San Jose police, but the first that has turned deadly.