A masked man who was shot and killed by police officers in Dawson Creek, B.C., had refused to throw away his knife, even as he lay bleeding from his wound, says a witness.

Mike Irmen was walking toward a local restaurant on Thursday evening when he happened upon two officers pointing guns at the suspect. He says there was lots of screaming back and forth as the officers told the suspect to put his weapon down. 

And that's when Irmen heard the gunshot. 

"I saw the guy fall to the ground on his right. Instantly lots of blood flowing out of him," he says. 

"He still refused to remove the knife from his hand or throw it away from his body. He just hung on to it … probably a minute or two minutes went by, and then the officers went and booted the knife away from him."

One officer handcuffed the bleeding man and another grabbed a first aid kit from the police car. 

The exchange was caught on video and posted to Facebook

Watch the video. Warning: Disturbing content

RAW: Dawson Creek police shooting. Warning: Disturbing content0:16

Police watchdog investigating

The Independent Investigations Office, the province's police watchdog, has been called to Dawson Creek to look into the shooting, which occurred outside an open house for the controversial Site C dam project. 

Initially it was believed police were called to the area because of a man causing a disturbance inside the open house. 

However the IIO said on Friday evening that the man who was fatally shot by police was not the man who caused the disturbance. Instead, this was another aggressive man who was carrying a knife and wearing a mask outside the open house. 

IIO spokeswoman Kellie Kilpatrick says the office would not identify the police officer involved in the shooting. 

Kilpatrick says this investigation has been one of the most difficult the office has encountered. 

Dawson Creek shooting

B.C.'s Independent Investigations Office has taken over the investigation of the shooting by a police officer. (CBC)

"This has a lot of moving parts," she says. "This is the first time that we've had such a significant change in the information we're reporting."

Officials have not released any details about the man who was killed and say they're still trying to identify him. 

RCMP said in a statement earlier on Friday that efforts to de-escalate the situation were unsuccessful and the man was shot during a confrontation. 

The man was taken to hospital, but died of his injuries. 

Irmen says that when police pulled the man's mask off — which looked to Irmen like a Guy Fawkes mask — the suspect appeared to be a young man. 

"I could see right away he was pretty white. There was a big pool of blood where he was laying."

Community in shock

Dawson Creek Mayor Dale Bumstead is upset the shooting happened in a city he brags about as being safe. 

"Somebody lost their life yesterday, senselessly in my view, and I just hate the fact that it happened in my community," he says. 

"You know my heart goes out to the families as well as to the RCMP. It's just unbelievable to me."

Irmen says he feels the officers acted appropriately. 

'They did what I feel was correct and protected everyone that was around the same location." 

This is the fifth police-related shooting the IIO has responded to since April 1. 

In 2014, there were 11 shootings involving officers, and five in 2013. 

With files from Brett Hyde and Audrey McKinnon