Yuri Budanov was sentenced to 10 years in jail for kidnapping and strangling to death 18-year-old Heda Kungayeva in 2000, during a war between Islamist Chechen separatists and the federal government.
His 2009 release on parole sparked protests in Chechnya, but was cheered by Russian ultra-nationalists and neo-Nazis.
An unidentified assassin fired six shots at Budanov as the 48-year-old walked out of an office, Russia's top investigative agency said. Four of the shots hit him in the head, killing him instantly, and his body was found on a pavement next to a playground.
The assassin left a gun with a silencer in a half-burned car that was found several streets away from the murder site, the Investigative Committee said.
Human rights activists have accused Russian security forces and their pro-Moscow Chechen allies of widespread abuses against residents of Chechnya, including kidnapping, torture and extrajudicial killings. Thousands of civilians were killed or went missing during and after the conflict.
Budanov was one of only a handful of Russian officers prosecuted over what rights groups say were widespread atrocities during two wars in Chechnya.
During the trial, Budanov said he strangled Ms Kungayeva in a fit of rage, believing she was a rebel sniper. Lawyers for her family also accused him of raping and torturing her, but these charges were later dropped.
Ms Kungayeva's father, Visa Kungayev, who now lives with his family in Norway, told the RIA Novosti news agency the shooting was a "dog's death for a dog."
He added: "Other people don't need to avenge my daughter, and they won't."