West Mercia Police said a 48-year-old man was killed in Telford after a taser was used on him, with the individual being pronounced dead at 3am.
The man suffered a cardiac arrest after receiving medical treatment, and has now been named as Atkinson, who scored 38 goals in 114 appearances for Villa.
His career highlight came in 1994 when he scored in the League Cup final win over Manchester United.
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"West Mercia Police can confirm that officers responded to a report for the concern for the safety of an individual at approximately 1.30am this morning at an address in Telford.
"Upon arrival Taser was deployed and a 48-year-old man, who subsequently received medical attention, was pronounced dead at approximately 3am.
"West Mercia Police are unable to comment any further as the incident has been referred to the Independent Police Complaints Commission (IPCC) as is normal procedure, and will assist the IPCC with their inquiries."
The man was named locally as Atkinson.
The player's father, Ernest, 85, told the Birmingham Mail: "He [Dalian] was in a real state. I don’t know if he was drunk or on drugs but he was very agitated and his mind was upset.
"The last thing he said to me was ‘don’t move’ when the police came to the door. He was threatening and very upset. I didn’t call the police but someone else did.
"He got Tasered in the street outside in the road. I didn’t see him but I saw a flash. I haven’t had any sleep and cannot take it in. "The police are dealing with this now."
Atkinson started his career with Ipswich and had spells with Sheffield Wednesday and then Real Sociedad before joining Villa for £1.6 million in July 1991.
The striker scored a famous wonder goal against Wimbledon in the 1992-93 season.
After Villa, Atkinson joined Turkish club Fenerbahce and then finished his career in England at Manchester City.
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