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 Freeman.
Freeman was wanted over the fatal shootings of police officers 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.
He was believed to be hiding out in a shipping container in Walwa, more than two hours' drive from Porepunkah on the Victorian-NSW border.
Victoria Police said no police officers were injured during the shooting on Monday.
"The state coroner will attend the scene and the investigation will be oversighted by Professional Standards Command, as per standard process for a police shooting," a spokesperson said.Â
"Further information will be released today as the situation develops."
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.
The police union praised police for finding Freeman after months of searching densing bushland but said his death wouldn't lessen the trauma of losing Det Sen Const Thompson or Sen Const de Waart-Hottart.
"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."
Freeman, also known as Desmond Filby, had not been seen since fleeing into bushland near his home shortly after the shooting.
Local federal MP Helen Haines said a dark cloud had hung over the Porepunkah community for the past seven months.
"This will come as a relief to the whole community," she said.
Attorney-General Sonya Kilkenny said her thoughts were with the Porepunkah 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 body of the self-described "sovereign citizen".
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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