Salman Taseer, 64, was getting into his car in the fashionable Koshar Market in Islamabad in the early afternoon when he was assassinated at point-blank range allegedly by one of his security guards.
During the morning, Taseer had been to see Pakistani President Asif Ali Zardari, had had other political meetings and then went to a restaurant in the market before returning to his car.
After he was shot he was rushed to the Federal Government Services Hospital but was pronounced dead on arrival. Doctors reportedly said they found 26 bullets in his body.
Unconfirmed reports also said that up to five other people were injured in the shooting.
Television footage showed a silver sedan car with several bullet holes in the bodywork, a blood-stained spot on the road about 10 feet from car and close-up shots of several spent cartridges.
Police said the suspected killer, Malik Mumtaz Hussain Qadri, a member of the Punjab province's Elite Force militia, immediately surrendered to police and handed over his officially issued submachine gun. He is being held for questioning.
Pakistani Prime Minister Yousuf Raza Gilani declared three days of national mourning, ordered flags be flown at half-mast and said an inquiry will be launched immediately into the killing.
The death of Taseer, a veteran member of the Pakistan People's Party, follows that of former Prime Minister Benazir Bhutto, and leader of the PPP. She was killed in a suicide attack when leaving an election rally in the city of Rawalpindi in December 2007.
Taseer also was a reformist politician and recently had proposed making the country's blasphemy laws less stringent.
Interior Minister Rehman Malik told reporters that the killer confessed to police that he shot Taseer because of the politician's public opposition to the blasphemy laws.
"The police guard who killed him says he did this because Mr. Taseer recently defended the proposed amendments to the blasphemy law," Malik said.
"This is what he told the police after surrendering himself. But we are investigating to find out whether it was his individual act or whether someone else was also behind it."
Taseer also recently appealed for a pardon for a Christian woman, Asia Bibi, who was sentenced in November to death for allegedly insulting the Prophet Muhammad.
Bibi, 45, is an illiterate farm worker in the Punjab, is married to another laborer and they have five children. She is the first woman to be sentenced to death under the blasphemy law but no date for execution has been set.
Zardari can pardon Bibi. But he ordered a review of the case after an international outcry -- including from the pope -- over the death sentence.
The sentence has divided public opinion in the country. Some extremist Muslim clerics have called for her killing as soon as possible, even if done by a member of the public.
Religious tensions have been rising in Pakistan in the past several years because attacks on Christians by Muslim extremists. Nearly 97 percent of Pakistan's 175 million people are Muslim while less than 2 percent -- less than 3 million -- are Christians.
In July, two Christian brothers accused of writing a pamphlet critical of the Prophet Muhammad were killed as they left a courthouse under armed police guard in Faisalabad.