Zahra Shahid Hussain, the 60-year-old vice-president of the party's Sindh unit, was shot by two unidentified men outside her home in Defence Phase IV last night.
She died while being taken to a nearby hospital.
Zahra, a mother figure for party workers, was a member of the party's central executive committee.
The motive for the murder could not immediately be ascertained. The killers escaped on a motorcycle.
"The assailants opened fire on Zahra at the gate of her residence. Apparently they were there to target her only", a police official told Geo News.
Cricketer-turned-politician Imran Khan immediately held MQM chief Altaf Hussain directly responsible for the killing.
"I hold Altaf Hussain directly responsible for the murder as he had openly threatened Pakistan Tehrik-e-Insaf workers and leaders through public broadcasts," Imran said in a statement from his hospital bed late last night.
Khan said Altaf Hussain had been issuing threatening statements against his party leaders and workers since the elections on May 11.
A senior police official said they were investigating from two angles whether it was a target killing or a deadly reaction to a robbery attempt.
Khan further held the British Government responsible, claiming that the UK had been warned to act against Altaf Hussain following open threats to kill his party workers.
Hussain has lived in London in self-exile since 1993.
Shortly after the incident, the MQM chief issued a statement where he condemned the murder and demanded that the government immediately arrest the culprits.
SP Clifton Division Nasir Aftab said that initial findings pointed to a case of a purse snatching gone wrong.
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