Neither the driver nor the passenger of vehicle saw the dog before it was hit in Mount Isa on Sunday afternoon.
A police officer attending the scene observed the animal was showing "obvious signs of trauma injuries" and was in distress.
He decided to euthanise the dog immediately by shooting it to avoid further suffering for the animal, Queensland Police said on Monday.
But video footage surfacing online of the incident has caused outrage, with the family that owned the pet reportedly seeing their dog being put down.
The animal can be seen wagging its tail in the footage, as people begin to scream when the gun is fired.
After reviewing body-worn camera footage, Queensland Police defended their actions describing the shooting as "the most humane and suitable course of action available at the time".
"We have confirmed the animal was significantly injured and the actions taken by officers was to prevent prolonged suffering and further distress," the force explained.
The incident has been criticised by animals rights groups who argued euthanasia should be conducted with sensitivity.
RSPCA Queensland said it was aware of "distressing footage" involving a dog reportedly injured after allegedly being struck by a police vehicle.
"Any seriously injured animal should receive prompt assistance," the group said on Monday.
"Where euthanasia is the best option to prevent further suffering, it should be carried out promptly, using a method that minimises pain, fear and distress."
11°C