Constable James Forcillo had been suspended since the shooting of Sammy Adib Yatim July 27, the Toronto Star reported.
Forcillo, a six-year police veteran, shot Yatim nine times after the teenager approached the officer. Witnesses, who said Yatim did not appear mentally stable, said he had ordered passengers off the bus while holding a knife in one hand and his exposed penis with the other.
After Yatim was shot, a bystander said the suspect was Tasered by a supervisor.
During a press conference Monday, a spokesman for the Special Investigations Unit said SIU Director Ian Scott had determined there were "reasonable grounds" Forcillo had committed "a criminal offense."
Forcillo, who faces second-degree murder charges, has not yet been arrested.