The incident took place on Sunday in the eastern province of Shandong, at the Taian Tiger Mountain Park.
Authorities said the 65-year-old keeper was cleaning the enclosure when the lion bit him on his shoulders and neck. He died later from his injuries.
The lion was on the loose in the zoo for more than an hour before it was shot dead by police.
'Rusty and rotting'
Reports in Chinese media did not say how the lion managed to get out of its enclosure after the early morning attack.
Officials put up steel barriers at the park's entrance, while zoo staff as well as visitors who had arrived for a morning swim in a pond in the park were evacuated.
Beijing Youth Daily quoted a police spokesman as saying they mobilised local officers as well as special forces to the park.
The spokesman said they cornered the lion by a wall within the zoo grounds, and shot it dead to "ensure the safety of park visitors".
A reporter with news portal Youth.cn said that shortly after 08:00 local time, he heard a shot, then "continuous gunfire" 10 minutes later.
The park reopened for business in the afternoon.
The incident is currently the third most popular trending topic on the Chinese microblog network Weibo.
Many questioned if it was necessary to kill the lion and raised concerns about the safety and living conditions in zoos, which have been criticised by animal rights groups.
"What humans like about lions is their fierceness, but this has resulted in lions losing their freedom, being starved and living in bad conditions, and now this one has lost its life," wrote one Weibo user.
Others however argued that the lion needed to be put down as it had killed a man and posed a danger to others.
The Taian Tiger Mountain Park houses a range of animals including deer, pigs, camels and birds in wire cages. An undercover report by Iqilu.com last year found it was in "serious disrepair".
The news portal, which published pictures, said its reporter found some cages were "rusty and rotting, posing a safety issue". A park official told them that they would do a clean-up and necessary repairs.
Activists with China Zoo Watch last August uncovered widespread abuse of tigers in zoos, and also found some were being used in illegal animal shows, reported China Daily.
A lion in a Chinese zoo was shot dead after it killed one of its keepers and escaped its enclosure.