A passer-by also sustained a bullet wound as the cop and muggers exchanged fire in Taimuria area of the city.
A CCTV video of the incident revealed that the former cop was trying to rob a policeman as the latter was drawing money from an ATM.
The police also confirmed the development saying that the husband had murdered his wife over a domestic dispute.
The dacoit went away in a white Corolla vehicle with jewelry and cash amount, the family said.
The entire incident which occurred in the Nazimabad area of the city was captured on CCTV footage.
A suspected robber was also killed during the attempt from the police constable to foil the mugging bid at the Karimabad Bridge.
Another robber has been arrested unharmed by police from Federal B Area, said the SSP Central.
The alleged foiled mugging incident in Korangi took a twist after eye-witness claims police opened fire on passers-by.
A youngster was shot dead while another person sustained injuries in North Nazimabad area of the city.