One suspect was shot during the incident and died at the hospital. Two others are still on the loose.
According to Police Commissioner Dermot Shea, the lieutenant, a 15-year department veteran, is recovering after being shot multiple times during an attempted robbery.
"He was conscious when I arrived and I was able to briefly interact with him. He has multiple gunshot wounds. He is lucky to be alive," said Shea.
"When is this luck gonna run out?" said Lou Turco, president of the Lieutenants Benevolent Association. "We always talk about getting guns off the street. We gotta get guns off the street. Yes, we gotta get guns off the street, but we gotta get the individual carrying the gun off the street."
WATCH: NYPD Shares Update On Lieutenant Shot In Queens
Hundreds of concertgoers were suddenly ushered out of La Boom nightclub during a performance by Puerto Rican rapper Myke Towers when the barrage of bullets erupted near 57th Street and Northern Boulevard in Woodside shortly after 3 a.m.
"I'm inside, it gets cut off and we're all told to leave and then we go outside, we see ambulances, cop cars, everything," one concertgoer said.
Police said the commotion started moments before when the off-duty lieutenant was leaving the concert. On his way out, he was confronted by several armed men wearing ski masks, police said.
"We believe these individuals were attempting to rob the officer, possibly of jewelry that the officer was wearing. Moments later there was an exchange of gunfire between the officer and at least one of the perpetrators," Shea said.
Sources said the masked men may have been after the lieutenant's gold chain, CBS2's Kiran Dhillon reported.
The lieutenant fired eight shots and at least one suspect fired nine, according to police.
The lieutenant and a suspect were rushed to Elmhurst Hospital, where the suspect was pronounced dead. The lieutenant was listed in critical, but stable condition.
"We saw the body cameras and this officer had minutes to live, and the first responding officers and then the FDNY, I can't believe how much work and how dedicated they were to saving this officer's life, and then to bring him here, and the staff at Elmhurst, just a phenomenal job," said Turco.
Several streets along Northern Boulevard remained blocked as officers canvassed the area for surveillance video and witnesses. According to officials, the suspect's semi-automatic handgun with an extended magazine was recovered at the scene.
The suspect had at least one prior arrest for gang assault in New York City.
Police are looking into whether this shooting is tied to a citywide pattern of clubgoers and restaurant patrons being targeted for jewelry, like one on Monday in the Bronx.
Either way, it's unnerving for people who live and work nearby.
"It was kinda shocking because I work here all the time and it seems like a pretty peaceful place, you know, for something like that to happen," said Kevin Ramos.
A concertgoer told CBS2 the violence is worrisome.
"It makes people feel unsafe and that's not of an environment that people would want to live in," they said.
Police sources said a second suspect was questioned at Lincoln Hospital, but no arrests have been made.
The state Attorney General's Office has opened an investigation into the shooting.
Anyone with information is asked to call the NYPD's Crime Stoppers hotline at 1-800-577-TIPS (8477), or for Spanish, 1-888-57-PISTA (74782). You can also submit a tip via their website or via DM on Twitter, @NYPDTips. All calls are kept confidential.
CBS2's Andrea Grymes and Kiran Dhillon contributed to this report.
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