Turkish officials called the attack as an 'act of terror'.
The incident which occurred at the high-end Reina nightclub in the city left 40 others injured, reports said.
Speaking on the attack, Istanbul governor Vasip Sahin was quoted as saying by Turkish state-run news agency Anadolu: "At 1.15 a.m., a terrorist carrying a long-barreled weapon martyred the police officer waiting outside, and then martyred another citizen to enter."
“He then carried out this violent and cruel act by spraying bullets on innocent people who were celebrating the new year," Sahin said.
No group has claimed responsibility for the attack so far.
The incident occurred at a time when the city was soaked in new year celebrations.
Turkey had witnessed multiple attacks in recent times.
The last one being on Dec 10, twin bombing outside football stadium in Istanbul city had left at least 44 people killed.
Kurdish militant group had claimed responsibility for the attack.
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