Xiaopeng Wang, a taxi driver, took action after being battered repeatedly with a metal bar in his own home by Steven Shaw, 32.
Shaw had broken into the property with his younger brother Craig, 21, in the early hours of the morning and demanded money.
The pair also attacked Mr Wang's wife, pulling back her hair so that she was forced to watch as her husband was beaten in front of her. The "brutal experience" only ended when Mr Wang struck the older brother in the head with a meat cleaver causing a "sharp force trauma".
Sitting at Shaw's inquest at Nottingham coroner's court on Monday, Coroner Mairin Casey recorded a verdict of lawful killing.
She told the hearing: "The defensive action taken by Mr Wang was proportionate and justified.
"This was a harrowing and brutal experience for all of them, and I understand they are still traumatised."
Steven Shaw, of Bestwood, Nottingham, and Craig Shaw, from Derby, broke into the Wang's home on March 31 last year at around 2.30am.
Mr Wang was bludgeoned with a wheel brace, a steel bar used for changing car tyres, while his wife was also punched as she tried to protect their two year old daughter.
Police believe that the vicious 10 to 15 minute ordeal was "random" as the Shaw brothers had never met the couple before. They were only prevented from continuing their assault after Mr Wang successfully fended off the attack with the cleaver.
Steven Shaw was taken to hospital following the blow where he later died from his injuries. Toxicology reports found traces of cocaine and alcohol in his bloodstream.
Last year, his brother was jailed for eight and a half years at Nottingham Crown Court after he pleaded guilty to aggravated burglary.
He was told that the death of his brother was no mitigation for the "sustained and brutal" assault on a couple who feared for their lives.
A third man, getaway driver Daniel Vincent Miller, 25, of no fixed abode, admitted burglary and was jailed for three years.
Sentencing Shaw and Miller at the time, Judge Michael Stokes said: "It is difficult to imagine a more terrifying prospect for a young couple in bed in their house, with their two-year-old child, than to hear and see two men breaking into their home and then attacking them in this vicious way. They must have been absolutely terrified."
In June last year Kenneth Clarke, the Justice Secretary, announced that an act of Parliament would be used to "clarify" the existing legal right of householders to use "reasonable force" against intruders.
His statement came shortly after Peter Flanagan, a 59-year-old engineer, was arrested on suspicion of murder after stabbing to death an armed burglar, John Bennell. He was later released without charge, with prosecutors saying they were satisfied he had acted "in self defence".
