Former Hizbul Mujahideen militant Abdul Majid Dar was on Sunday shot dead in Sopore town in Baramulla district in north Kashmir.
Police sources in Srinagar said that Dar, along with his mother and sister, had gone to Noorbagh locality to supervise the construction of his house.
As he was leaving the place, militants opened fire on Dar's car, injuring all three.
Dar was rushed to a hospital but succumbed to his injuries before aid could be administered.
His mother Shah Begum and sister Rehana were seriously injured and rushed to Srinagar for treatment.
No one has claimed responsibility for the attack.
Dar, known for his proximity to the Hizbul Mujahideen supreme commander Syed Salahuddin, quickly rose to the number two position in the outfit. He was the commander of the militant outfit's cadres in Jammu and Kashmir.
Dar created ripples when he declared a unilateral ceasefire in July 2000. However, the Pakistan-based top leadership of the militant outfit sabotaged his offer.
The withdrawal of the ceasefire and the subsequent escalation in violence undermined Dar's importance to a large extent but he always claimed to enjoy the support of the cadres.
Following internal bickering, he was expelled from the outfit along with some of his supporters.
His pro-talks views had made him a suspect in the eyes of the Pakistan-based terrorist outfits.
He had refused to participate in the recently held assembly election, or even to support any party.