Bhadreswar Municipality Chairman Manoj Upadhyay (45), also a Trinamool Congress leader, was shot from point blank range while he was returning home on his motorcycle on November 21.
As per the state secretariat sources, Pandey will be replaced by Ajay Kumar, who was the Inspector-general of police, Railways in West Bengal.
Pandey will be the new IGP (Traffic) south Bengal, he said.
Upadhyay was targeted as he was taking action against various illegal activities in the area, Urban Development and Municipal Affairs Minister Firhad Hakim had said.