Tommy Crossan, the organisation's former Belfast leader, was shot dead in the grounds of an industrial estate near a housing estate in West Belfast.
He had reportedly received a death threat from his former allies which have opposed the peace process which largely ended three decades of violence and transformed Northern Ireland.
Nationalist SDLP councillor Colin Keenan said: "We have long hoped that the shadow of death had been lifted from West Belfast.
"Today's event is a terrible, tragic reminder of the violent conflict of the past."
The Police Service of Northern Ireland (PSNI) closed one of the main arterial routes into the city as its investigation began.
A PSNI spokesman said: "Police are investigating a fatal shooting in the Springfield Road area of West Belfast this afternoon.
"One man has been shot dead in the vicinity of the Peter Pan Centre."
The CIRA murdered Police Constable Stephen Carroll in Lurgan, Co Armagh, in March 2009. Members of the security forces have been on high alert for attacks by various extremist factions who have also killed two soldiers and a prison officer.
Prison officer David Black was murdered as he drove to work in November 2012.