The slain officer, Paul Tuozzolo, 41, was a 19-year veteran of the department, O'Neill said.
Emmanuel Kwo, a sergeant with nine years experience, was shot in the leg and hospitalized, O'Neill said. He was in stable condition.
O'Neill said a woman called 911 about 2:45 p.m. to say an armed man had broken into an apartment. Inside were the man's estranged wife, their 3-year-old son, the 911 caller and a 13-year-old child, O'Neill said.
As officers approached the residence they learned the suspect had fled in a red Jeep.
Officers located the vehicle about a mile from the apartment. The driver emerged with a .45-caliber pistol and started shooting, O'Neill said.
Police returned fire, killing the man.
The suspect was identified as Manuel Rosales, 35, O'Neill said. Officials did not comment on why Rosales was there and what occurred inside before he left.
O'Neill said Rosales was a resident of Suffolk County and had 17 previous arrests, though he didn't specify what charges were involved.
Tuozzolo was married with two young children, Mayor Bill de Blasio said. He was "a man who committed his life to protecting all of us," de Blasio said.
"The city is in mourning and the family of the NYPD is in mourning, particularly the men and women of the four-three precinct," de Blasio said.
Prior to this incident, at least 52 law enforcement officers had been fatally shot in the line of duty in the United States and Puerto Rico in 2016, according to the National Law Enforcement Officers Memorial Fund.
That's the highest one-year total since 2011, when 73 officers were shot dead, the fund says.