"While some things could, with the benefit of hindsight, have been done better, the IPCA investigation clearly shows the decisions taken were good decisions, given the circumstances as the officers perceived them at the time," Mr O'Connor said in response to the report.
The IPCA cleared police of any misconduct over the shooting of Mr Wallace by Senior Constable Keith Abbott after the 23-year-old had gone on a rampage in the Taranaki town of Waitara on April 30, 2000.
"This is the final chapter in an incredibly and unnecessarily long series of investigations into the shooting of Steven Wallace by an officer acting in self-defence," Mr O'Connor said.
"Most importantly, the IPCA finds conclusively that Constable A was justified in shooting Steven Wallace in self-defence," said Mr O'Connor, who fought against Mr Abbott being named publicly.
"Mr Wallace, who was rapidly advancing with a weapon raised, and verbally threatening the officer, had ignored all appeals to stop and simply left the officer with no choice. This has been the finding of every investigation over the last nine years, including a trial before a jury."
The report also addressed head-on the untrue rumours and misguided criticisms levelled over the years and refuted each of them in turn, including some of the "unwarranted" criticisms made by coroner Gordon Matenga in his 2007 report into the incident, Mr O'Connor said.
"It has taken nine years -- which is nine years too long -- but the IPCA's report should finally close the book on this incident and allow all those involved to move on," Mr O'Connor said.
However, Mr Wallace's mother Raewyn said she would examine her options following the report.
"This is just another police cover-up," she told Radio New Zealand.
She was critical of police policy which allowed Mr Abbott to use firearms despite a victim impact statement which she said showed he was traumatised after being shot at in an armed robbery in 1991.
The IPCA said there was no evidence Mr Abbott was suffering post traumatic stress disorder at the time of Mr Wallace's shooting.
Mrs Wallace was also bitter about there being no breath or blood-testing of police officers when they had been involved in incidents such as police shootings.
"They can say he wasn't drinking, I can say he was, but there is no test to prove it. They are still not doing the test now," she said.
IPCA chairwoman Justice Lowell Goddard recommended mandatory drug and alcohol testing for officers involved in critical incidents.
She said it would be of considerable benefit to police and would indicate a willingness on their part to ensure accountability.
Police Commissioner Howard Broad said his executive was developing policy on drug and alcohol testing.
"Justice Goddard's comments will add impetus to our work on drug and alcohol testing," he said in a statement.
A police spokesman later said a policy would be in place in the next few months.
Mr Broad said the range of investigations and legal proceedings since Mr Wallace's shooting had placed incredible pressures on the police officers and the families of all those involved.
"I hope this last official review, and the clarity its findings provide, allows this difficult chapter of our history to be closed.
"Justice Goddard's findings reflect that our staff acted appropriately, and in accordance with their training and policy, when dealing with a rapidly changing and difficult situation."
