Bobo Min Hteik, 37, was the administrator of Mrauk U township, where police shot dead seven ethnic Rakhine Buddhists on January 16 in a heavy-handed attempt to control a mob angry at the cancellation of a ceremony.
He was found dead on the side of the road on Tuesday evening next to a car, with stab wounds to the chest and shoulder, according to a statement from the Ministry of Home Affairs.
The protesters briefly seized a government office and hoisted the Rakhine state flag before police shot into the crowd.
It has not been established who gave the order for police to use live ammunition.
Three days after the incident, however, authorities announced that Bobo Min Hteik would be transferred to the state capital Sittwe.
There are now "significant" tensions between locals and authorities in the wake of the Mrauk U violence, said political analyst Richard Horsey.
Ethnic and religious hatred divides Rakhine state, which forms Myanmar's western border with Bangladesh.
Mrauk U, which is home to a complex of ancient Buddhist temples, has been left largely unscathed by unrest further north in Rakhine, where the military unleashed a brutal assault that has driven nearly 700,000 Rohingya Muslims over the border into Bangladesh since August.
Rakhine Buddhist mobs have been accused of helping the military torch hundreds of Rohingya villages. They revile the community as illegal "Bengali" immigrants bent on taking over the state.
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