The civilian, a motorcycle ride-sharing driver, was hit at the site of violent clashes on Thursday near parliament as police sought to disperse demonstrators protesting about a number of issues including lawmakers' pay and education funding.
The protests on Friday afternoon in the capital of Southeast Asia's largest economy prompted a number of schools to allow students to leave early and banks and businesses to ask employees to work from home. The military has been deployed in some areas, visuals broadcast by local media showed.
Drivers, students in colourful jackets and Indonesians from other walks of life descended on the country's parliament and police headquarters in Jakarta to stage protests on Friday, throwing rocks at the gates and chanting "Killer! Killer!".
Motorcycle rider Pendi Nasir, 43, was among them, and called for a transparent investigation from the police over the death of the driver, Affan Kurniawan.
"We don't want our colleagues here to become victims of this riot again," he told Reuters, calling for action against those at fault.
Stand-up comedian Aci Resti attended a protest at the parliament against housing allowance for lawmakers.
"I'm here to voice the opinions of my friends, who are fed up with everything, with the members of the House of Representatives, with everything, with the government," she said.
Protesters were undeterred by earlier remarks by Prabowo calling for calm, expressing condolences for Affan Kurniawan's death and ordering a thorough probe of the incident.
"I am shocked and disappointed by the excessive actions of the officers," Prabowo, whose presidency nears its one year anniversary in October, said in a video message. "I have ordered a thorough and transparent investigation ... and officers involved must be held accountable."
Wearing their signature green jackets, drivers also staged protests in other cities including Surabaya and Bandung on Java island and Gorontalo on Sulawesi.
Following the unrest, the rupiah closed 0.9 per cent weaker against the dollar at 16,495. The stock index fell as much as 2.3 per cent to hit its lowest point since August 12, before closing with a 1.5 per cent drop after regaining some of its losses on Friday.
"If Prabowo isn't careful ... protests may devolve into chaos," Made Supriatma, a visiting fellow at the ISEAS-Yusof Ishak Institute in Singapore, told Reuters.
As Thursday's protest persisted into the night, local media reported that riot police fired tear gas and used water cannon to try to disperse people.
The capital's police chief, Asep Edi Suheri, said that during the clashes on Thursday an armoured police vehicle hit and killed Kurniawan, who worked for ride sharing services Gojek and Grab. He apologised to Kurniawan's family.
A motorcycle drivers' association said Kurniawan was not involved in the protests.
On Friday afternoon, national police official Abdul Karim told reporters authorities would detain for 20 days the seven policemen who were in the vehicle that hit Kurniawan for a breach of ethics and said interrogations remained under way.
Following Kurniawan's death, a group led by motorcycle drivers protested in front of the riot police's headquarters on Thursday night and on Friday, local media reported.
Kurniawan's funeral was attended by hundreds of fellow ride-sharing motorcycle drivers, who escorted his body to the burial site in a convoy of two-wheelers through the centre of Jakarta.
"We are deeply disappointed, especially with the security officials and national police chief," Ari Potret, a driver who attended Kurniawan's funeral, told Reuters. "This is barbaric."
Jakarta Legal Aid urged the government to release 600 people who had been arrested during the demonstrations.
