Officers opened fire in west London on Saturday morning during an incident involving a car that was colliding with vehicles.
The Ukrainian embassy said its ambassador's vehicle was "deliberately rammed" as it sat parked outside the building in Holland Park.
When officers arrived on the scene, a car was "driven at them", the Met said.
Officers used firearms and a Taser before arresting a man in his 40s on suspicion of attempted murder.
Police said the uninjured man was "taken to a central London hospital as a precaution".
They added that the situation was neither ongoing nor being treated as terror-related.
The Met said its officers arrived at the scene just before 10:00 BST after "reports of antisocial behaviour involving a car".
Describing the events of Saturday morning, the Ukrainian embassy said that after seeing the ambassador's car being targeted, police "blocked up" the other vehicle.
"Nevertheless, despite the police actions, the attacker hit the ambassador's car again," the embassy said.
It added police were "forced to open fire on the perpetrator's vehicle".
The embassy said none of its staff had been injured and that police were now investigating "the suspect's identity and motive for the attack".
The police arrested the man on suspicion of the attempted murder of police officers and criminal damage.
Darcy Mercier, who lives across the road from the Ukrainian embassy, told the BBC the man arrived in the street around 07:00 and was "blasting music".
Mr Mercier said he approached the man and asked him to turn the music off but was ignored.
"He sat in the middle of the street for over two hours. I was out on my terrace when he started ramming the embassy car," he added.
Local resident Heather Feiner, originally from the US, added: "From the time I heard the shots until I got to the window, which took about 15 seconds, all these police cars were already there.
"I could see a police officer that fired the shots. I could see them pointing their gun at the car.
"From what I could see [the suspect] didn't appear to be struggling at that point."
Emma Slatter, who witnessed the arrest, believes the man reversed into the diplomat's car while backing away from an oncoming police car.
"It seems like he was moving erratically or wanting to move away from being boxed in, maybe not realising there were police behind him as well," she said.
She added: "That was when he collided backwards."
Ch Supt Andy Walker, from the Met's specialist firearms command, said: "As is standard procedure, an investigation is now ongoing into the discharge of a police firearm during this incident.
"While this takes place, I would like to pay tribute to the officers involved this morning who responded swiftly to this incident and put themselves in harm's way, as they do every day, to keep the people of London safe."
Foreign Office minister Sir Alan Duncan tweeted that he was "very concerned" to hear about the incident and added that he'd spoken with Ukrainian ambassador to the UK Natalia Galibarenko.
Very concerned to hear of the incident near the Ukrainian Embassy this morning. I have just spoken to Ambassador Galibarenko @UkrEmbLondon and am glad to hear that no one was hurt. Thanks to the @metpoliceuk for such a swift response.— Sir Alan Duncan MP (@AlanDuncanMP) April 13, 2019
The MP for Rutland and Melton also thanked the police for their "swift response".