The officer, Roy Oliver, "violated several departmental policies," police told reporters without offering details because the officer has a right to appeal.
Police chief Jonathan Haber said he made the decision after reviewing the findings of an internal investigation. The officer has 10 days to appeal his termination, Haber said.
"The past 67 hours have been challenging for all us," he said. "My heartfelt condolences to the parents of Jordan Edwards, and we support them in their time of need."
A police representative for Oliver couldn't be immediately reached on Tuesday.
Oliver's firing comes a day after the Balch Springs police chief admitted he "misspoke"
when he said the car Jordan was riding in Saturday night was moving "aggressively" toward police -- leading one officer to fire his rifle toward the car.
On Monday, Haber said body camera footage showed the car was driving forward, away from the officers -- not reversing toward them.
"I take responsibility for that," Haber said. He added that the officer's behavior "did not meet our core values."
An Edwards family attorney praised the police chief for owning up to his mistake.
"Before the chief made the retraction of the statement, he stopped by and he spoke with the family," attorney Lee Merritt told HLN on Tuesday.
He added: "I give him much respect for being brave enough to do that on a national platform. It may be embarrassing, but we need to change the culture where officers don't cover up for the indefensible."
'A loving child'
In a statement released Tuesday, Jordan's family's described him as "a loving child, with a humble and sharing spirit."
"The bond that he shared with his family, particularly his siblings, was indescribable. Not only have Jordan's brothers lost their best friend; they witnessed firsthand his violent, senseless murder," the statement said. "Their young lives will forever be altered."
The Edwards family also asked the public to refrain from protests and marches at this time as they prepare for the slain teenager's funeral and try to cope with the loss.
"What we desire only second to having our beloved Jordan back, is JUSTICE FOR JORDAN," the statement said.
How the night unfolded
Officers broke up the house party in response to reports of underaged drinking.
Balch Springs police spokesman Pedro Gonzalez said the terminated officer was the second officer on the scene. The other officer who responded is still employed.
Gonzalez said officers were looking for the owners of the house when shots were allegedly heard in the area, creating chaos right before Jordan was shot.
Haber declined to say whether any shots were fired or whether the boys in the car were armed, citing the ongoing investigation.
Police said the officers confronted a vehicle reversing down the street. The vehicle continued to reverse and back into the main roadway despite commands from the officer. The vehicle pulled forward as the officer continued to approach it giving verbal commands, and then continued on the main roadway driving away from the officer.
Jasmine Crockett, another Edwards family attorney, said Jordan and his two brothers were among the five people in the car when the officer fired.
"As law enforcement approached the house, they saw the lights. They began to run, as many kids began to run," Crockett said Tuesday on "Primetime Justice with Ashleigh Banfield" on HLN. "As they're running to the car, they actually heard approximately five shots."
"And then ultimately the gunfire is turned on them," she added.
One officer fired a rifle into the car as it was driving away from the party. Jordan, the front-seat passenger, was struck in the head.
The officer fired three shots into the car, Merritt told CNN, based on eyewitness accounts from the other boys in the car.
Jordan's 16-year-old brother and others were detained and questioned, but the boys were not arrested nor charged, Merritt said.
Crockett said Jordan was a teenager who was both interested in academics and sports. And he was a social butterfly who was the one who wanted to go to the party, she said.
"I'm concerned about how that's going to weigh on his older brother because he had been tugging at his older brother about going to this party, and ultimately it resulted in his death," Crockett said.
Attorney: 'There's more than enough probable cause'
Both the Dallas County Sheriff's Department and the Dallas County District Attorney's Office have launched criminal investigations into the shooting.
Merritt said the officer should be treated like "any other citizen who commits a crime"-- and therefore should have been arrested by now.
"We have a dead 15-year-old with no causation on his part or anybody of the vehicle," the attorney said.
"If justice is to be had, by now a warrant should have been issued. There's more than enough probable cause to arrest this officer."
Merritt said the teen's death is a call to action against excessive police force.
"We are declaring (a) war on bad policing," Merritt said Monday. "America, throughout the country, must figure out a way to police its citizens without killing them."