Soldier Lee Rigby, a 25-year-old who served in Afghanistan, was hacked to death near an army barracks in south London on Wednesday.
The Daily Mirror newspaper, which published the first footage of the suspects' shooting, said the video was filmed by a resident in a nearby block of flats using a camera phone.
It shows the first suspect, thought to be Michael Adebolajo, a British-born convert to Islam, charging towards the police and coming within a few feet of the officers before they have time to get out of their car.
The first shots send him sprawling to the ground in the middle of the road. About eight shots and screams from bystanders can be heard. The two men are in hospital under armed guard.