Victoria Police confirmed a man was killed at a rural address in Victoria's northeast shortly after 8.30am on Monday as part of the operation to locate the gunman.
Chief Commissioner Mike Bush said police were unable to officially confirm the person shot dead was Freeman pending a formal identification process.
But he said the incident "brings closure to what was a tragic and terrible event".
"There was an appeal to encourage the person to come out," Mr Bush told reporters.
"It did result from a stand-off. He then exited the building. There was an opportunity for him to surrender peacefully which he did not
"Everything I know at this point tells me that this shooting was justified."
Freeman was wanted over the fatal shootings of Neal Thompson and Vadim de Waart-Hottart, who were among a team of officers serving a warrant at his home in the small town of Porepunkah in late August.
The killer, a self-described "sovereign citizen" who was also known as Desmond Filby, had not been seen since fleeing into bushland near his home shortly after the shooting.
He was believed to be hiding out in a container-like building at a rural property near Walwa, more than two hours' drive from Porepunkah on the Victorian-NSW border.
No police were injured during Monday's shooting.
Detective Senior Constable Thompson, 59, was just a week away from retiring, while Senior Constable de Waart-Hottart, 34, was on temporary assignment to the area.
Sen Const de Waart-Hottart's parents were in Melbourne on Friday for a ceremony commemorating the 40th anniversary of the Russell Street bombing.
Mr Bush said the families of the slain officers were the first to be notified of the shooting.
The police union praised officers for finding Freeman after months of searching dense bushland but said his death wouldn't lessen the trauma of losing their two slain colleagues.
"Today, we won't reflect on the loss of a coward," a spokesperson said.
"We will remember the courage and bravery of our fallen members and every officer that has doggedly pursued this outcome for the community."
Local federal MP Helen Haines said a dark cloud had hung over the Porepunkah community for the past seven months and the killer's death would come as a relief.
Attorney-General Sonya Kilkenny said her thoughts were with the community and the families of the two slain officers.
Hundreds of police from across Australia took part in the search for Freeman in extreme conditions, including snow and heat, and dense bushland in mountainous terrain.
Investigators in December revealed they had shifted their search efforts to locating the killer's body.
Mr Bush maintained on Monday the available information previously suggested Freeman had taken his own life.
In February, a multiple-day effort to scour the bush with cadaver dogs and drones yielded nothing.
Victoria Police offered a $1 million reward and the possibility of indemnity for information leading to his capture, the largest financial offer in the state's history for facilitating an arrest.
Freeman's wife, Mali, who was present during the fatal shootings of the officers, and a 15-year-old boy were previously arrested but released without charge.
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