Knoxville Police Department announced the shooting at Austin-East Magnet High School on Monday afternoon.
While residents were warned to avoid the area of active investigation, two anonymous sources told Knox News the situation was no longer “active”.
Multiple agencies that responded to the shooting blocked access to parts of the neighbourhood, while school spokeswoman Carly Harrington told the outlet the school was in lockdown as the investigation unfolded.
The school established a nearby baseball field near Wilson Avenue and Hembree Street as a reunification site for parents to find their children after the school lockdowns was lifted.
This latest incident follows recent shootings in Colorado, Atlanta and South Carolina that have led to a push by the Biden administration for tougher gun control reforms.
Knoxville police confirmed that the suspect was killed in a shootout at the school around 3.15pm local time.
“Knoxville Police Department officers responded to Austin-East Magnet High School on the report of a male suspect who was possibly armed in the school. Upon approach of the subject, shots were fired,” they said in a statement.
One man was pronounced dead at the scene while another was detained for questioning, the statement said.
A video circulating online appeared to show an individual in handcuffs being led away from the school. Police said the Tennessee Bureau of Investigation would lead the probe into the shooting, while the Bureau of Alcohol Tobacco, Firearms and Explosives confirmed special agents from their Nashville office responded to assist law enforcement.
The injured police officer was taken to UT Medical Centre with non-life-threatening injuries, and no other gunshot wounds were reported.
Knoxville Mayor Indya Kincannon said she visited the officer, who was “in good spirits” and said he’d rather it be him who was shot than someone else.
The superintendent of Knox County Schools, Bob Thomas, tweeted later on Monday that the building had been secured and students released to join their families.
“We are gathering information about this tragic situation and will provide additional information as soon as possible,” he said.
School board education representative Evetty Satterfield told the Knox News that the school would be closed, and classes cancelled, on Tuesday and Wednesday.
As the event was unfolding, Tennessee governor Bill Lee said at a news conference the shooting was a “very difficult and tragic situation”.
“I’ve just been informed about that just recently, we don’t have a lot of details, it’s a current situation right now and law enforcement will update us appropriately,” he said.
“I just wanted to make reference to that and ask, for those who are watching online or otherwise, to pray for that situation and for the families and victims that might be affected by that in our state.”
Mr Lee signed a bill on Thursday allowing gun owners over the age of 21 to carry firearms, open or concealed, without the need for a permit or training.