The police dog handler stayed at the property to watch the door in case the man tried to escape while the other two officers returned to their vehicle to arm themselves.
Shortly after the two officers returned to the dog handler's position, the man opened the basement door and stepped out. He presented what appeared to be a firearm, pointing it at police while continuing to threaten to shoot them.
Police warned the man to drop his weapon a number of times but he failed to comply.
At 2.19am a police officer fired a single shot at the man which struck his left elbow. Simultaneously, the police dog handler deployed his dog. Police then restrained and arrested the man.
During the later police investigation, it was established that the man did not have a firearm and had in fact brandished a bundle of kindling wood wrapped in a black singlet.
IPCA chairman Judge Colin Doherty found the officer was lawfully justified in firing his rifle.
"Based on the threats made by the offender, police reasonably believed that he was in possession of a firearm and it was his intention to cause grievous bodily harm or death," Doherty said.
"The authority finds that the officer was lawfully justified in firing his rifle at the man to defend himself and his colleague from the perceived threat of death or grievous bodily harm."
The IPCA also found that the police dog handler was justified in deploying his dog to apprehend the offender, that police did not use excessive force during the arrest, and that police provided appropriate medical assistance until the ambulance arrived.
Nelson Bays area commander Inspector Mat Arnold-Kelly said he fully supported the actions of the officers involved in this difficult, dynamic situation.
"We train, equip and empower our staff to make split second decisions to protect themselves and the community, in this instance the officers involved showed great courage," he said.
The IPCA noted the decision making of the officers involved was sound, they demonstrated great courage and a strong commitment to protecting the public at large.
A 35-year-old man was charged with driving with excess blood alcohol, being unlawfully in an enclosed yard, presenting an object that resembled a firearm and two counts of threatening to kill.
He appeared in the Nelson District Court on the July 9 and was sentenced to two years and three months imprisonment.