The wounded - two women and six men - all were expected to survive, city officials said.
Officials said Jeffrey Johnson, 58, a fashion accessories designer, was disgruntled after being fired a year ago from Hazan Imports, located near the Empire State Building. Shortly after 9am he shot a 41-year-old former Hazan co-worker three times at close range with a .45-calibre handgun, they said.
As police closed in on him on the sidewalk outside the 102-storey Empire State Building, Johnson turned his gun on them and officers shot back and killed him, Police Commissioner Raymond Kelly said.
Investigators were attempting to determine whether Johnson shot anyone beyond his initial target. Some of the surviving victims could have been hit by the two police officers who were shooting at Johnson, Mayor Michael Bloomberg said.
Other than its proximity to the violence, there was no link to the historic Empire State Building and Bloomberg ruled out any connection to terrorism.
The shooting rattled an always-busy part of Midtown Manhattan at the height of the tourist season.
"I saw a friend of mine lying on the street bleeding. She was in shock," said Christopher Collins, who said he tried to keep her calm and as he rode with her in the ambulance. "I'm glad the cops shot him dead. One less trial we have to go through."
It was the third mass shooting of the summer in the United States, following an assault on a crowded cinema in Colorado and an attack on a Sikh temple in Wisconsin, rekindling debate about gun control in America. The New York shooting was distinct in that Johnson appeared to have only one intended victim.
"We are not immune to the national problem of gun violence," said Bloomberg, a leading national proponent of gun control and founder of the group Mayors Against Illegal Guns.
Bloomberg has often called New York the safest big city in America, citing a declining crime rate that had the city on pace for another record low number of homicides in 2012.
"It's time to get the guns off the street," said Brandon Thorpe, 23, a janitor who said he has lost five friends to gun violence. "This is a tourist attraction. How are we supposed to make people feel safe if they come here and see something like this?"
The Empire State Building is walking distance from Pennsylvania Station and Grand Central Terminal, two of New York City's main transportation hubs, and the shooting took place at the end of the morning rush hour.
"I heard the gunshots. It was like pop, pop, pop. It was definitely in a bunch," said Dahlia Anister, 33, who works at an office near the building.
Police cordoned off the area and closed several streets.
Mail courier James Bolden, 31, said he saw a "guy laying on the (sidewalk), bleeding from the neck and barely breathing."
"Everybody was crowded around him taking pictures and video, and security guys were yelling everybody to get back, and give him space. He was barely breathing," Bolden said.
One witness said she saw a woman who was shot in the foot and another woman being taken away in an ambulance.
"I was walking down 33rd (Street) and there's a dead guy. I just saw pools of blood. He was laying down and the was blood pooling (around him)," Justin Kellis, 35, who works nearby.
