Ghulam Rasool Ganai (52) was shot at and injured by militants at his shop in Mattan area of Anantnag, a police official said.
He said Ganai succumbed to his injuries while being shifted to a hospital.
This was the third killing in South Kashmir in the last 24 hours.
Earlier, police recovered bullet-riddled body of a 22- year-old man in Kulgam District.
Showkat Ahmad Dar was kidnapped by suspected militants on Sunday.
Last night,a policeman was shot dead by militants in Awantipora area of Pulwama District when he was returning from the marriage ceremony of his relative.
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