Dissident Republicans are believed to be responsible for the death of Lyra McKee, 29, who was shot under violent concern in the Creggan area of the city, according to police. Images from the scene showed that cars knocked out when a crowd threw fireworks and petrol bombs at emergency vehicles.
The city – referred to by Irish nationalists as Derry and British union members such as Londonderry – is a short drive from the border with the Republic of Ireland.
McKee stood near a police vehicle when she was injured by a single gun shooting in a residential area. She died shortly after her injuries, said assistant manager Mark Hamilton to reporters on Friday. The police do not know if she was working as a journalist at the time, or was in the city for personal reasons.
During a press conference on Friday, Hamilton McKee described death as "horrendous and unjust" and appealed to calm. At night, he announced that the police treated the shot as a "terrorist accident" and had launched a murder inquiry.
McKee, according to literary agents Janklow & Nesbit UK, was born in Belfast and had written for a number of publications, including The Atlantic and Buzzfeed News.
Hamilton confirmed that the police suspect that the shot was carried out by dissident republicans, namely the new Irish Republican army (IRA).
Thursday's turmoil in Derry comes in advance of the Easter weekend, during which Republicans mark the anniversary of the 1916 Easter rise, considered among the most important dates in the struggle for Irish independence.
They were worried that the weapons could have been used during the Easter weekend in the city.
According to Hamil ton, a crowd gathered shortly after 9 pm (4 pm ET) on Thursday and over 50 petrol bombs were thrown on officers during the "orchestrated violence". Two cars were hijacked and fired on fire, he said.
"The police used no force last night. All violence was directed against us," Hamilton said.
At around 11.00 am (6 pm ET), there were about 100 people in the area, including young people and media members. The shooter kicked a number of shots, Hamilton said.
CNN's Bianca Britton, Jonny Hallam, Sara Mazloumsaki in Atlanta and Peter Taggart in Northern Ireland contributed to this report.