The incident happened around 12:35 p.m. near South Broadway and North Avenue, officials said.
Police said it all started as a dispute among individuals inside of a multi-unit apartment complex. The dispute led to a physical fight, then a call came in about a man armed with a knife.
Police responded to the scene, closing off surrounding streets during the investigation into what they initially called a "criminal matter." Investigators say it quickly escalated when officers confronted the suspect.
"Officers responded to the area. An adult male was barricaded and armed with a weapon," Aurora Police Public Information Officer Jim Levicki said. "Responding officers encountered the male who displayed a knife. Shots were fired by Aurora police officers and the male sustained at least one gunshot wound."
Police said officers immediately rendered aid to the suspect and he was taken to a hospital.
In an update late Wednesday, police officials said the suspect was a 27-year-old man and he had died from his injuries following the police-involved shooting.
Per policy, the officers involved in the shooting were also taken to hospitals.
Large police presence at officer-involved shooting in Aurora
Police also confirmed there were no other injuries on scene.
There was no current danger to the public.
The Fox Valley Major Crimes Task Force is leading the investigation into the officers' actions.
No further information was available.