The motive for the attack is so far unknown but Pakistani security forces have battled Islamist fighters in the region for several years.
Although the official was returning from talks with tribal leaders on rising crime when the assassins struck, he had previously worked in Peshawar, a city which is home to many Islamists opposed both to the Pakistani government and the US-backed government of nearby Afghanistan.
"He was a very important man. He played a key role in gathering information that led to a few major operations," said the official, who declined to be identified.
Pakistan's 'gun capital'
Darra Adam Khel, a small town in the North West Frontier Province near Peshawar, is known as Pakistan's "gun capital".
The town's ethnic Pushtun residents have been making weapons, including rifles, pistols and shotguns, for generations.
Though notorious as a haven for smugglers, the town has been relatively free of the militant violence that has plagued other parts of Pakistan's tribal belt along the border with Afghanistan.
Few of Pakistan's federal laws apply in tribal areas and the government runs them indirectly, through centuries-old tribal traditions.