The incident took place on Saturday at a campus in Atlanta and has lead to an independent investigation.
The deceased has been identified as Scout Schultz, the president of the Pride Alliance at the Georgia Institute of Technology.
Police said they reached the scene following a phonecall about a man carrying lethal weapon.
The entire scene was captured on video by another student, showing the 21-year-old refusing to obey police orders to put don the sharp object.
According to the footage, the deceased was shot dead as he started to confront the officers while shouting 'shoot me'.
However, it has sparked a backlash from Schultz's mother, who said that the police was wrong in using a lethal weapon.
Schultz identified himself as non-binary, which is also referred to as genderqueer or GQ, a term for people who express a combination of masculinity and femininity, or neither, in their gender expression.
Schultz's mother added that the deceased suffered from various medical issues, including depression and had attempted suicide a couple of years ago.
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