Israel's army said in a statement that the Palestinian shot toward troops, who returned fire, while the Gaza health ministry confirmed a 26-year-old man identified as Marwan Nasser was killed.
During the incident, an Israeli tank also targeted a Hamas military post in the area, the army said, adding there were no casualties or damage on the Israeli side.
It was the latest in a series of such incidents along the tense Gaza border in recent days.
On Saturday, the Israeli army said its troops shot dead four heavily armed Palestinians on the Gaza border, adding one had managed to cross and throw a grenade at soldiers.
Earlier on August 1, a Palestinian seeking to avenge his brother's death by Israeli fire entered Israel from Gaza and opened fire on soldiers, the army said.
Three Israeli soldiers were wounded and the Palestinian was killed, the army said.
Regular protests and clashes erupted along the border of the blockaded Gaza Strip in March 2018.
At least 302 Palestinians have been killed by Israeli fire in Gaza or the border area since March 2018, the majority during the demonstrations and clashes.
Seven Israelis have also been killed in Gaza-related violence.
The protests have declined in intensity in recent months following a UN and Egyptian-brokered truce under which Israel agreed to ease aspects of its blockade in return for calm.
Israel and Palestinian militants in Gaza, ruled by Islamist movement Hamas, have fought three wars since 2008.
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