Officer A, as he's known publicly for legal reasons, had pleaded not guilty to murdering Dwayne Johnstone outside Lismore Base Hospital on March 15, 2019.
After a three-week NSW Supreme Court trial and nearly a week of deliberations, the jury was discharged on Monday.
Mr Johnstone, 43, was being escorted out of the hospital when he shoved another prison officer and ran across the road, the jury was told.
The Crown argued Mr Johnstone was posing no risk to anyone when shot.
Officer A drew his work-issued revolver, shouted a warning and then fired three times at Mr Johnstone whose wrists and ankles were restrained.
The last round struck Mr Johnstone in the back.
"All this is happening in 11 seconds," crown prosecutor Ken McKay SC told the Sydney trial.
In a police interview the officer admitted aiming at Mr Johnstone's centre of mass, which Mr McKay said represented one element of murder.
But the officer's barrister said he was fulfilling a duty to prevent an escape, believing he and his colleague wouldn't be able to chase down the running Mr Johnstone.
"He did not do so out of malice, out of revenge, out of anger," Phillip Strickland SC said.
Officer A yelled "stop or I'll shoot" twice and fired two warning shots, as per training for dealing with an escape, Mr Strickland said.
"You must give a warning to the person escaping to give them a chance to stop. Not once but several times," he said.
Mr Johnstone had been arrested the day before and charged with assault and possession of a Taser. He was taken to hospital after facing court and being remanded in custody.
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