The 57-year-old constable, whose name hasn't yet been made public, went to the property in northwest Tasmania with other officers about 11am on Monday.
He was killed as he approached the house after leaving his car, allegedly shot by a man who lived at the property.
The tragedy was "truly shocking", Tasmania Police Commissioner Donna Adams told reporters.
"He was a genuine, dependable police officer who served the community well for the past 25 years," she said.
It is understood to be the first fatal shooting of a police officer in Tasmania since 1922.
Another officer fired at the alleged offender, who was struck in the hand and surrendered, police said.
He was taken to hospital for treatment under police guard. No charges have been laid.
Officers were at the property in the rural area of North Motton to serve a court-approved warrant to repossess the home, Ms Adams said.
A special operations group that travelled to the property with the two officers was understood to be at the entrance to the driveway, further away from the home.
Police professional standards and the coroner will investigate the death.
"We will review every aspect of this response and if changes need to be made, they will be made," Ms Adams said.
She praised the second officer's bravery and gave her heartfelt condolences to the man's family, friends and colleagues.
The visit to the house was part of "routine" duties, she said.
"To every police officer, we know policing can be risky but we expect every officer to finish their shift and come home to their family," she said.
"I've been a police officer for 38 year and I've never seen an incident like this."
North Motton is home to a few hundred people and is about a 15-minute drive south from the coast.
"This is a tragedy. We will wrap our arms around our colleagues," Police Association Tasmania president Shane Tilley said.
"There are going to be some difficult weeks and months ahead."
Premier Jeremy Rockliff said the "love of an entire state" was with the officer's family and friends.
"You will have every possible support made available, as we come to grips with this heartbreaking tragedy," he posted on social media.
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