The incident is reported by news daily Heute to have taken place around 6:10 p.m. at a branch of the Billa supermarket chain in Hütteldorferstraße.
According to local witnesses, the event took place near the Hanusch hospital. Two employees are believed to have been held at gunpoint in the supermarket after it was closed.
The dead robber has been identified as a Bosnian man (49), who is a suspect in at least two previous robberies. He was armed with a pistol with a silencer, and was described by police spokesman Paul Eidenberger as "a professional."
Reports suggest two police officers were shot, with one being seriously injured with a head shot, and the other with a wound on his hip. A third officer was lightly injured.
The seriously wounded police officer was immediately taken to Vienna's general hospital by rescue helicopter for an emergency operation.
The Bosnian suspect is believed to have been shot and killed by the WEGA armed police unit, when they encountered him in a nearby stairwell.
Initial reports of an accomplice have been denied by a police spokesman. A police helicopter and armored vehicle were deployed for the operation.
Witnesses report a large area was cordoned off while police searched for a second suspect, with none found.
According to a spokesman, a silent alarm was trigged at 18:10, with the market normally closing at 18:00. A team of regular police responded immediately, cornering the suspect, who allegedly opened fire on them, wounding two officers, one seriously.
The suspect was able to briefly escape from the Billa market, but then encountered the WEGA armed response team, who fatally shot the man in a second gunfight.
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