Police shot the man after he appeared to charge them while armed with a steak knife in the front yard of an Ettalong home on Sunday.

The actions of three "experienced" officers, as well as the dead man, will form the centre of a critical incident investigation after the man died from a single bullet wound to his chest.

The three officers arrived at the house about 8.30am, after being called to reports of a domestic assault, when they were confronted by the man.

Witnesses said that as the officers approached the house, the 45-year-old man stormed through a door and charged them.

He was treated by the officers and paramedics before being taken to Gosford Hospital where he later died.

It is believed none of the officers had time to use capsicum spray or a Taser gun.

A local female resident said a friend of hers who lives just in front of the house where the shooting occured heard a "bang" about 8am.

Before the shooting, the friend told her a hysterical woman was seen running out of the house.

"After my husband picked me up from my morning stroll at about 8.30am, we drove past the area, and there was a couple of cars and an ambo in the driveway," the woman said.

"Shortly after police cars arrived like I have never seen before."

Police cordoned off the area where the shooting took place, which was at the intersection of Bangalow Street between Broken Bay Road and Barrenjoey Road.

The NSW Police Homicide Squad will investigate the shooting.

"The officers' welfare is being closely  monitored and our thoughts and prayers go out to the family and friends of the deceased," Northern Region commander Assistant Commissioner Jeff Loy said.

No police officers were injured during the incident.

Assistant Commissioner Loy said training required officers to aim at body mass when shooting their guns.

- with The Newcastle Herald