Police approached and a man got out with a long-barrelled firearm and allegedly shot at the officer, he said.
"Both officers were struck, one was killed," Coster said.
The offenders then allegedly fled the scene in another vehicle. At some point the car allegedly struck a member of the public, injuring them. That person is in moderate condition.
Residents on Reynella Place reported "loud bangs" out on the road.
"At first I thought it was construction, which is pretty common here," said resident Mark. He was hanging out the washing at the time.
"But then I heard it again, after a distinct pause, and thought, 'That sounds like a gunshot'."
Elaine Taniela said her father's friend drove past at the time and described the scene: "As he neared the first roundabout (near Gallony Avenue) he saw a cop on the ground.
"He said it looked like he was having a seizure. He was shaking."
A police officer was heard calling for help, saying he had been hit and was bleeding. Another officer was on his radio, hunched over and holding part of his body.
Mark went to check out the back of his property, where he got a shock to see a police officer crouching in his neighbour's backyard.
"He dropped to the ground and was looking around a bit, clutching his chest. Then he jumped over the fence and ran off up the street."
The police Eagle helicopter arrived within minutes. Officers rushing to the scene were armed. Eight schools in the area were put into lockdown.
Massey Primary School principal Bruce Barnes sent a message out to parents on Facebook at midday, saying "all students are safe in their classrooms".
At Feathers Early Learning Centre on Lincoln Park Ave, children were kept indoors and a movie was put on to occupy the kids. Parents who turned up to pick up their children ended up staying on site while police sought the alleged offenders.
A manhunt fanned out across West Auckland and streets were cordoned off. On social media, residents reported armed police checking cars one at a time, asking occupants to wind their windows down.
In Wellington, the Police Commissioner booked a flight to Auckland to offer his support.
At a hastily-called press conference at Wellington Airport at 1.45pm, Coster confirmed that one of the police officers had died.
"We have lost a colleague and friend in our police whānau," he said.
Prime Minister Jacinda Ardern, the daughter of a police officer, said it was "devastating news".
It was the first police officer killed in the line of duty in New Zealand in 11 years. Not since Senior Constable Len Snee at the Napier house siege in 2009 had an officer been slain on the job.
At around 2.30pm, Police activity centred at a Housing New Zealand property on Rena Place in West Harbour. Police cars careened around the corner from Moire Road, some of them driving up onto the grass.
A man came out of the house with his hands in the air and was arrested. As neighbours stood in the street and watched, another man came out of the house and was also arrested. Police would not immediately confirm a link to the Massey shooting.
An hour later, police cars began a chase near the Northwestern Motorway.
Spikes were laid and a car was stopped on the Lincoln Road overbridge. Photographs from the scene showed a black sedan with tyres torn to shreds. The driver was taken away by police.
In Massey, the lockdown was lifted and students were allowed to head home.
At 5.30pm, Coster had arrived at the Henderson police station and told media they had two people in custody and had located a firearm.
Officers across Auckland would remain armed until Coster was confident the "right people are in custody".
A cordon remained in place on Reynella Drive and an investigation team is working there.
"Our priority is to hold this offender to account," Coster said.
"I ask that you keep this officer's family in your thoughts, as their loved one will not be coming home tonight."
The routine traffic stop on that quiet West Auckland Street six hours earlier was the last act of an officer who had "dedicated his career to keeping us safe," Police Minister Stuart Nash said.
"What an absolute tragedy," he said. "What can you say?"