The video shows police firing four shots at 38-year-old Alfred Olango, a Ugandan refugee, Tuesday shortly after they arrived at a Mexican restaurant in El Cajon, the AP report said.
Police were responding to reports that a mentally unstable man was walking in traffic.
It was later revealed that Olango had been grieving the death of a close friend and was not mentally ill, according to the man's mother, who was interviewed by NBC San Diego.
When officers surrounded him, Olango assumed a shooting position, police said, and reached for what they believed to be a weapon before they opened fire.
Police later identified the unknown object as an electronic cigarette.
The video was released after the shooting sparked several days of demonstrations in the San Diego area.
The police department had previously released a single frame of video that appeared to show Olango with his arms out in what they described as a shooting position, but protesters and local news media demanded the full video.
Police Chief Jeff Davis relented, citing concerns over the escalating violence during some of the protests.
"It's about time," said attorney Dan Gilleon, who is representing the Olango family.
The city of El Cajon has a population of 100,000 and is known to attract refugees from Iraq and Syria, The Associated Press reported.
The incident is the latest in a number of high-profile police shootings involving people of color, which has repeatedly thrust the issue into the national spotlight. According to data collected by the Guardian and The Washington Post, several hundred people have been killed during encounters with police so far this year.
WARNING: Some may be find the following video disturbing:
— Andrew Luria (@AndrewLuria) September 30, 2016
San Diego police release footage of an unarmed black man fatally shot during an encounter posted first on http://lawpallp.tumblr.com