The identity of the shooters was not immediately known, but the official's death was the first assassination of a member of the transitional government since the fall of Moamer Kadhafi's regime in October 2011.
"Hassan al-Droui, the deputy minister for industry, was killed by unknown attackers overnight, during a visit to his native city of Sirte," a security official told AFP.
"Unidentified gunmen sprayed bullets on Mr. Droui in central Sirte," the official said, speaking on condition of anonymity.
Droui was a former member of the National Transitional Council, the political arm of the rebellion that brought an end to Kadhafi's 42-year rule.
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He was appointed deputy minister for industry by the transitional government's first prime minister, Abdelrahim al-Kib, and kept his job when Ali Zeidan took over.
Droui's hometown, which lies on the Mediterranean coast about 250 miles (400 kilometres) east of the capital Tripoli, was the last regime bastion to fall into rebel hands in 2011.