A group of ultras attacked two SPOs when they were patrolling in a local market at Padia, about 70 km from Malkangiri, and fired at them, Malkangiri Superintendent of Police Akhilesh Singh said.
The two police personnel returned the fire, but SPO Ajit Sodi (22) was killed while his colleague Lachma Madkami was critically injured in the attack, he said.
The injured was admitted to hospital.
A combing operation has been launched to track down the culprits.
Meanwhile, on the second day of the 'Martyrs Week', movement of vehicles was dusrupted with the termination of long and short-distance passenger buses for security reasons in districts like Malkangiri, Koraput, Rayagada, Gajapati and Kandhamal, official sources said.
Trucks and other private vehicles also remained off the road while shops and business establishments downed their shutter in several interior areas though urban centres saw usual commercial activities.