Firdous Khan was killed in an hour-long gun battle with police in Manghopir neighbourhood of Karachi, said Usman Bajwa, a senior official in the Crime Investigations Department.
"Firdous was the mastermind behind carrying out the bombing attack on the convoy of Benazir Bhutto when she returned to Karachi from exile in 2007," Bajwa said.
Several bomb blasts took place when Benazir Bhutto returned home to a big welcome in October 2007 but she escaped unhurt although 140 people were killed in those attacks.
Bajwa said Firdous was the facilitator and also trained the suicide bombers who carried out the attacks.
"Firdous trained the suicide bombers and took them to the target area."
The government of former military ruler Pervez Musharraf had blamed the assassination on Pakistani Taliban chief Baitullah Mehsud, who denied any involvement.
Mehsud was killed in a US drone attack in August 2009.
Bajwa said the shootout took place early today after CID police raided the Mangopir area following a tip off.
Karachi, a city of 18 million people which contributes 42 per cent of Pakistan's GDP, has been racked by militants, especially the Taliban.
Over 7,000 people have been killed in the insurgency by the Tehreek-e-Taliban Pakistan since it began in 2007.
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