Michael Paterson, 62, shot and injured his wife's new boyfriend in the garden of his house in the Old Bridge of Urr, a hamlet of 20 houses three miles from Castle Douglas in Kirkcudbrightshire.
Mr Paterson, who ran a successful business specialising in quad bikes and motorcycles, then ran off and shot himself in a field near his home.
It is believed his estranged wife and their two teenage children were in the house when the tragedy unfolded.
It is thought his wife had left Mr Paterson one month earlier for 48-year-old Phil Sayers, who comes from the Thornhill area near Dumfries and is believed to work in a medical practice in Dumfries.
Mrs Paterson was collecting her children from her husband's house, where they had spent the weekend. She had arrived with Mr Sayers, who was shot by Mr Paterson as he stood waiting in the garden.
Mr Paterson's body was discovered later in a field near his house in the village by a couple walking their dog.
The alarm was raised by Mrs Paterson at noon yesterday.
The incident sparked a massive search of the area, with armed officers drafted in from all across the South-west. They combed farmland and along the River Urr, which runs nearby.
Farm workers and people living in the village were also alerted and they joined in the search for Mr Paterson's Land Rover.
A couple out walking their dog that made the grim discovery of Mr Paterson's body near the river. He is believed to have taken his own life and a shotgun was found nearby.
One man said: "We were asked by the police if we had seen anything and were asked to keep our eyes open. They were looking for a Land Rover.
"I think it was couple out for a walk with their dog that found Mr Paterson."
Mr Sayers was rushed 20 miles to Dumfries and Galloway Royal Infirmary after the incident, and his condition was described last night as serious but not life-threatening.
Mr Paterson ran the family business of J Paterson and Sons in Dalbeattie, which sells and repairs quad bikes and motorcycles.
A friend of the family, who did not wish to be named, said: "It's a terrible tragedy for the family. Michael was a highly successful businessman whose firm is known all over the country.
"They are a respected family and don't deserve this."
One person who lives in the village said: "Everyone knew Michael and many of the Patersons. I think the whole village is shocked by the news.Nothing much ever happens here."
Inquiries into the incident are being carried out by top CID officers and uniformed officers, with a base set up in Castle Douglas.
A spokesman from Dumfries and Galloway Police said: "As a result of this incident being notified to police, a firearms team was deployed and inquiries to locate the perpetrator started.
"Whilst the search was ongoing, information was received which led to the discovery of the body of a man, close to the location of the original shooting."
He went on: "At this stage, inquiries are still ongoing; however, police are not now looking for anyone else in connection with this incident.
"We can confirm that there is no current threat to the public as a result of this incident.
"The procurator-fiscal has been notified of this matter, and further a further statement will be released when more of the facts are known."