Police say the man was arrested for second-degree assault but has not been formally charged. Lilly is then seen stepping out of his vehicle, a black Toyota sedan, and walking back to confront the driver of the school bus.
His first court appearance is on Friday and he faces 20 years in prison if convicted.
Prosecutors say the bus driver was trying to navigate the Interstate 35W-Interstate 94 interchange in poor weather when the bus apparently scraped Lilly's vehicle.
Shocked motorists flooded 911 with calls that a bus driver had been shot along a major Minneapolis freeway at rush hour Tuesday.
"We do not believe there was a self-defense claim based upon the evidence that we have received so far", said prosecutor Dave Brown.
The shooter's employer said they've never had an incident with Lilly.
The 78-year-old bus driver, who wishes to remain anonymous, is still in satisfactory condition at Hennepin County Medical Center.
After the two vehicles made contact, the drivers pulled over on the highway's shoulder, police say.
The driver told Lilly he could not come in because there was a child onboard.
Officials said the bus driver stayed awake as he was taken to a nearby hospital and is doing OK.
He then walked back to the front of the bus and fired five shots at the bus windshield, the complaint states.
Lilly then walked to the driver's side of the bus where he pulled out his 9-millimeter semiautomatic pistol from its holster.
According to a criminal complaint, Minneapolis police officers were called to a shooting Tuesday on Interstate 35W near Chicago Avenue. Lilly told officers that he feared for his safety and that is why he shot at the bus driver.
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