Ali Hassan Al Jaber was returning to Benghazi from a nearby town after filing a report from an opposition protest when unknown fighters opened fire on a car he and his colleagues were travelling in.
wo people including Al Jaber were shot. Al Jaber was rushed to hospital, but did not survive.
Al Jazeera's Tony Birtley, reporting from Benghazi, said Al Jaber was hit by three shots and was wounded through the heart.
"This is an extension of the campaign against Al Jazeera, and Al Jazeera Arabic particularly - because everyone here watch Al Jazeera Arabic. Their work has been heroic, and it has been a great shock to lose a colleague."
'Cowardly crime'
Wadah Khanfar, the director-general of Al Jazeera, said the network "will not remain silent" and will pursue those behind the ambush through legal channels.
He said that the killing came after "an unprecedented campaign" against the network by Libyan leader Muammar Gaddafi.
"Al Jazeera condemns the cowardly crime, which comes as part of the Libyan regime's malicious campaign targeting Al Jazeera and its staff," the network said in a statement.
"Al Jazeera reiterates the assault cannot dent its resolve to continue its mission, professionally enlightening the public of the unfolding events in Libya and elsewhere.
"Al Jazeera stresses it will relentlessly prosecute and bring to justice all perpetrators and their accomplices."
Al Jaber, a Qatari national, was born in 1955 and received his bachelor and master's degrees in cinematography from the Academy of Arts in Cairo. He was the director of CNBC Arabiya TV bureau in Qatar.
He also served as a supervisor in the National Olympic Committee between 2002 and 2005 and held the office of Head of Filming Section in Qatar Television for more than 20 years.
During his tenure, he produced a number of documentaries including one on Qatar and another on Kuwait entitled "Plight and Tribulation".
His death marks the first report of a journalist killed in the current conflict in Libya.