Police opened fire after a car rammed through police barricades near the venue of the three-day Shangri-La Dialogue.
One man was shot dead and two others were arrested when the driver failed to stop the car.
"Preliminary investigations indicate that this is an isolated incident and is not terrorism related," police said in a statement.
Only after a bomb squad confirmed that there were no weapons or explosives in the car, the all-clear signal was given, and traffic, which was held up at a safe distance behind a cordon, allowed to resume.
Meanwhile, police have identified the three suspects involved in the shooting incident as Mohamed Taufik Zahar, 34, Mohamed Ismail, 31 and Muhammad Syahid Mohamed Yasni, 26.
Zahar was shot dead in the incident.
The three had a history of drugs and criminal offences, police said.
A bag containing white powdery substances, believed to be controlled drugs was also recovered from the vehicle.
Roads and pathways leading up to the hotel, located in Singapore's diplomatic area, were shut off with barricade tape after the incident.
It was the first time in seven years that police have had to open fire, with the last incident in 2008.
Speaking to reporters, Deputy Prime Minister Teo Chee Hean said the police swiftly brought the situation under control.
"The investigations so far indicate that the situation is related to drugs," he said, adding that the police would deal firmly with lawbreakers to maintain public safety and security.
It was also reported last week that the IS had identified Singapore as a possible target.
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