Hassan al Laqqis was shot from close range by a silenced gun as he arrived home at around midnight on Tuesday in the Hadath district of Beirut, a source close to Hezbollah said. Israel denies any role in his killing.
Hezbollah, which fought a 34-day war with Israel in 2006, had sent fighters into neighbouring Syria to support President Bashar al Assad against mainly Sunni Muslim rebels, a move that increased sectarian tensions in Lebanon.
A previously unknown group, Ahrar al Sunna Baalbek brigade, said on Twitter that it carried out the attack on Mr al Laqqis. The claim could not be verified but the group's name suggests Lebanese Sunni Muslim connections.
Footage from the scene broadcast by Hezbollah's Al Manar television yesterday showed two bullet marks in a wall and muddy footprints it said had been left by possibly more than one assailant.
Hezbollah described Mr al Laqqis, who was buried in Baalbek in the Bekaa Valley later in the day, as "one of the leaders of the Islamic resistance" against Israel and who had been frequently targeted by the Jewish state.
He had been with Hezbollah since it was set up with Iranian support in the 1980s to fight Israeli troops occupying south Lebanon. His son was killed in the 2006 war, Hezbollah added.
A statement from the militant group said: "The Israeli enemy tried to get to our martyr brother several times, in more than one location, but these attempts failed until this repugnant assassination."
The statement said that Israel would "bear full responsibility and all the consequences for this heinous crime".
In response, a spokesman for Israel's foreign ministry said: "This has strictly nothing to do Israel.
"Hezbollah has made a fool of itself in the past with these automatic and groundless accusations against Israel … If they are looking for explanations as to what is happening to them, they should examine their own actions."
The source close to Hezbollah said Mr al Laqqis had taken part in several battles inside Syria.
Five years ago, Hezbollah commander Imad Moughniyah was killed in a car bombing. Hezbollah has blamed Israel for Mr Moughniyah's death and vowed to avenge it.
The source also said Wednesday's assassination bore the hallmarks of an Israeli operation.
Analyst Charles Lister of IHS Jane's in London said it suggested an element of "professionalism and prior intelligence". He added: "What is very clear is that it comes under the context of Hezbollah and its role in Syria. It was expected that Hezbollah would blame Israel, but that is not necessarily the case."
The open role of Hezbollah fighters in the Syrian civil war and the steady flow of Lebanese Sunnis joining the anti-Assad rebels have fuelled sectarian strife in Lebanon.
Car bombs killed dozens of people in Beirut in August and a twin suicide attack on the Beirut embassy of Hezbollah's patron Iran killed at least 25 people last month.
Iran's foreign ministry blamed Israel for that attack, but responsibility was claimed by a Lebanon-based al Qaeda-linked group, the Abdullah Azzam brigades.
Hezbollah leader Sayyed Hassan Nasrallah said he believed the group had support from Saudi Arabia, Iran's main regional rival whose backing for Assad's foes has pushed it deeper into a proxy conflict in Syria against Tehran.