There were explosions for around 15 to 20 minutes on Thursday evening as air defence attempted to shoot it down in an area near the president’s office.
Ukraine presidential chief of staff Andriy Yermak initially said it was an enemy drone that had been shot down.
But the air force later admitted it was Ukrainian and had been destroyed to avoid “undesirable circumstances”.
In a statement, it said the Bayraktar TB2 UAV [unmanned aerial vehicle] had lost control around at 20:00 (17:00 GMT) in the Kyiv region, during a scheduled flight.
It added that it had taken a decision to shoot it down “since the uncontrolled presence of UAVs in the sky of the capital could lead to undesirable consequences”.
There were no casualties or injuries from the falling drone, it said.
“It’s a pity, but this is technology, and such cases happen,” the statement said. “It is probably a technical malfunction, the reasons are being established.”
Videos of efforts to shoot down the drone had been shared widely on social media. Cheers could be heard when the drone was finally taken down.
City military administration head Serhiy Popko said a fire was brought under control in a building where the drone was brought down in Solomyanskyi district, west of the city centre.
The incident comes after Russia accused Ukraine of carrying out an alleged drone attack on the Kremlin on Wednesday aimed at assassinating President Vladimir Putin, who was not in the building at the time.
On Thursday, Kremlin spokesman Dmitry Peskov said the US was “undoubtedly” behind the alleged attack, without providing evidence.
US National Security spokesman John Kirby called it a “ludicrous claim”.
Ukraine has said it had nothing to do with the alleged attack on the Kremlin, and has accused Moscow of staging the incident in order to escalate the war.