PC Perry Lisle, now retired from Northumbria Police, said he shot James Carlo Wilson as Mr Wilson went to raise a pistol he was holding a second time.
PC Lisle said he had been to many firearms incidents during his 23 years with the force.
But this was the first time anyone had pointed a gun at himself or a colleague.
It was also the first and only time he had fired his gun outside of training.
An inquest heard Mr Wilson, 24, rang police in the early hours to say he had a gun and was in Frenchman's Way, South Shields.
Mr Wilson said he was determined not to surrender the weapon and he threatened to shoot anyone who challenged him.
Officers first thought the call may have been a hoax but quickly established Mr Wilson was talking about himself.
Both armed response vehicles on duty at the time were sent to the scene.
PC Lisle said he was crewed with PC John Shield in Newcastle city centre when the call came over the radio.
The other armed response vehicle was at Newcastle airport, which meant PCs Lisle and Shield were the first armed officers to arrive at Frenchman's Way.
"There was a male in the street with a black object in his hand as we had been told," said PC Lisle.
"He was shouting, although I couldn't hear precisely what he was saying.
"Our instructions were to challenge him from cover, which was the police car.
"Both me and PC Shield identified ourselves and told the male to put the gun down, but he did not."
PC Shield fired a baton round at Mr Wilson.
"It hit him," said PC Lisle. "It knocked him off balance, but it didn't knock him to the ground, nor did it cause him to drop the weapon.
"He moved to his right, which I thought may have been him sighting PC Shield.
"He went to lift the gun again, it was at that point I could see it was a gun.
"I discharged my weapon and the male went to the ground.
"At that moment I thought I was going to be shot, or more particularly I thought PC Shield was going to be shot.
"My reaction was reasonable and proportionate in the circumstances."
Sam Faulks, representing the family, asked PC Lisle why he had aimed for the "body mass" - torso - of Mr Wilson.
"Our training is to do that," said PC Lisle. "It is the most effective way of neutralising the threat.
"Experience has shown accuracy in a real time incident is not as good as in training, so you aim for the largest part of the target.
"The weapon I was using can be lethal at two miles, so if you did hit an arm or a leg there is a danger the round would pass through and injure or kill anyone behind in the line of fire."
PC Lisle said the reason he shot Mr Wilson was because he went to raise the gun a second time.
"Had he kept the gun down by his side I would not have shot him," added the officer.
"What I did was reasonable and proportionate in the circumstances, and it was in accordance with Northumbria Police training."
Mr Faulks told the hearing there was no criticism by Mr Wilson's mother of PC Shield for firing the baton round.
Under questioning from John Beggs, for Northumbria Police, PC Shield said:
"When I pulled the trigger I thought either myself or PC Lisle was going to be shot.
"I'd never been in that situation before."
The inquest heard Mr Wilson died in hospital three days after the shooting in the early hours of March 29, 2016.
The gun was later identified as a Walther air pistol, described as a "convincing replica" of a real pistol.
A ballistics expert found the air pistol was faulty and a pellet fired from it would have been unlikely to pierce the skin.
The inquest at Mansion House in Jesmond is proceeding.