Mohammad Qateel Siddiqui, a member of the home-grown terror outfit, was suspected to have been strangled following a brawl with some yet to be identified fellow inmates.
"Qateel was murdered in the jail," a senior Maharashtra ATS official told PTI.
Siddiqui was in jail for his alleged role in planting a bomb outside a temple here and was a named accused in the Bangalore stadium blast.
Two low-intensity explosions near a packed Chinnaswamy cricket stadium less than an hour before an IPL match on April 17, 2010, had left 15 persons, including five security men injured.
Qateel, according to ATS sources, had also made a failed attempt to carry out terror strike by planting a bomb outside Shrimant Dagdusheth Halwai Ganapti Temple here.
He was arrested in November last year by the Delhi Police.
Those involved in the murder and motive behind the incident was not immediately known, sources said.
State Home Minister R R Patil announced a CID probe into the death of Siddiqui and ordered suspension of jail superintendent S V Khatavkar, his spokesperson said in Mumbai.
