Police union sources said the man attempted to enter the building with a knife before he was shot by officers, while the Interior Ministry said he may have been wearing an explosives vest.
Two officials have reportedly said the man had wires extending from his clothing and a bomb disposal team was sent to the scene.
Photographs shared on social media shows the man's body being inspected by a robot and French police said the neighbourhood in northern Paris has been locked down after the shooting.
A Paris police source confirmed that they are investigating the attack as potential terrorism.
'The man did have a belt, but it was a fake. The bomb-disposal unit confirmed it was a fake,' the police union source said.
A Paris police official said police are viewing the incident as 'more likely terrorism' than a standard criminal act.
A knife-wielding man shot dead by Paris police on Thursday as he tried to enter a police station was wearing a fake explosive belt, the Interior Ministry spokesman said,Reuters reports.
This confirmed earlier comments from a police union source. Asked if the belt was fake, the spokesman said: "Yes."