Residents from across the province joined the ceremony, expressing condemnation of violent unrest.
Lieutenant Aghajani, a member of the provincial law enforcement forces, was fatally shot in the chest during the confrontation with protesters on Tuesday. Despite efforts by medical teams, he succumbed to his injuries.
Three other officers were wounded in the same incident and transferred to medical centers for treatment.
Participants in the funeral emphasized that economic and livelihood-related demands should be pursued through legal and peaceful channels, while denouncing acts of violence.
Meanwhile, the southeastern city of Zahedan was also in mourning as residents held a solemn funeral for Lieutenant Mahmoud Haghighat, who was killed in a terrorist attack in Iranshahr.
According to official reports, Haghighat was shot by members of the so-called Jaish al-Adl militant group while on duty. The group claimed responsibility for the attack.
Haghighat is survived by two young children.
Cities across Iran have been witnessing growing protests for 11 days amid runaway prices and plunging national currency value.
Officials say they recognize peaceful protests but will not tolerate violent acts and will respond to them proportionately.