The incident unfolded after officers tried to pull over a car around 10:30 p.m. Wednesday at 4th and French streets, according to Natalie Garcia, public information officer for the Santa Ana Police Department.
The driver didn't stop, which prompted a short pursuit. Eventually, the driver went into a parking structure for a condominium complex, where police say he lived.
Investigators say the suspect's girlfriend and his 1-year-old baby were in the car at the time.
Police say the suspect had a firearm, but after getting out of the car with his hands up, he dropped the gun on the ground.
"There's a video circulating social media showing that the driver steps out of the vehicle with his hands up. However, we know now that the suspect was attempting to reach for the weapon again, at which the officer discharged his duty weapon," Garcia told Eyewitness News.
Police confirmed several shots were fired and the driver died at the scene. The girlfriend and baby were not hurt.
The shooting comes as Santa Ana Police Oversight Commission began formally reviewing citizen complaints this month - after years of delays.
Community advocates say incidents like this underscore why that oversight matters.
"We need to protect that Police Oversight Commission, we need to make sure that the city of Santa Ana and the people of Santa Ana have a right to democracy in police matters," said Abraham Quintana, with Community Service Organization, Orange County.
When asked whether he trusts Santa Ana police, Quintana said: "Not at all. There's a lot of things that they do. I don't see all of it but the things I do see, it's a lot like this."
The shooting is now being investigated by the Orange County District Attorney's Office, along with Santa Ana police detectives.