Two police officers have been cleared of any wrongdoing in the shooting death of a drunk Australia Post worker at Lake Macquarie in New South Wales.

Australia Post employee Stephen Hodge, 51, was shot dead by police after he flailed a knife at an officer in September 2015.

In handing down her inquest findings at Glebe Coroners Court today, Deputy State Coroner Teresa O'Sullivan suggested NSW Police consider integrating mental health in tactical response training and the practice of de-escalation techniques through role playing.

Australia Post employee Stephen Hodge brought a knife into the Warners Bay post office in September 2015. (9NEWS) (Supplied)

"Police have an extremely difficult job to do and often very little time to plan and find out all the information they need, particularly about someone's mental health," she said.

Speaking outside the court, Detective Chief Inspector David Laidlaw said the shooting was a tragedy that affected many lives.

"This is a tragedy that has occured to the Hodge family but also the two police officers involved," Insp Laidlaw said.

Hodge flailed a knife at the postmaster during his attack on the office. (9NEWS) (Supplied)

Stephen Hodge was a longtime employee of the post office. (9NEWS) (Supplied)

"I'm sure when they woke up on the day of the incident that they would never expect what happend to have occurred."

Two plain-clothes officers were called to the scene after reports the mentally ill postal worker had threatened to stab his manager at the Warners Bay post office nearly three years ago.

Mr Hodge chased postmaster Brendan Hogan outside the store with the knife after an argument before slashing his own wrist about 3pm on September 9.

Mr Hodge was shot dead by two police officers. (9NEWS) (Supplied)

The police have been cleared of any wrongdoing in the inquest. (9NEWS) (Supplied)

Senior Constables Jamie Taylor and Darren Hamilton pleaded with Mr Hodge to drop the weapon in the car park before opening fire, with Sen Const Taylor fatally hitting him in the chest and abdomen.

Sen Const Hamilton fired three shots with one bullet missing Mr Hodge. They did not ask him his name, what he wanted or where the postmaster was.

In the moments after Mr Hodge's death, the pair were confronted by his angry mother who said "Why did youse do this? He wouldn't hurt anyone. Why?" the inquest previously heard.

Detective Chief Inspector David Laidlaw said the shooting had been a tragedy for everyone involved. (9NEWS) (Supplied)

"Mr Hodge's death was tragic," Ms O'Sullivan said.

"It has deeply affected his family, his work colleagues and the police involved."