The Atlanta Police Department said the shooting was part of a targeted attack, with a group of men in masks shooting three men, including the 60-year-old Banks, at a residence.
One man was pronounced dead at the scene while Banks and the other man were taken to the hospital. The two were "alert, conscious and breathing" when they were transported to the hospital.
The police investigation is ongoing.
Banks was in the NFL from 1982-92, spending time with the Cleveland Browns, Indianapolis Colts and San Diego Chargers.
The linebacker was the No. 3 pick in the 1982 draft out of USC, winning the NFL Defensive Rookie of the Year after totaling 5.5 sacks in the shortened season. He earned four Pro Bowls in his five years with Cleveland and was named first-team All-Pro in 1983.