"Neda had not participated in the rally but, even if she had, they did not have the right to shoot her."
At least 19 people have been killed after protests over the June 12 presidential election spilled over into violence, according to Iranian state media.
Ebadi, who has represented political prisoners and victims of human rights violations for more than 20 years, said that the actions of the police and pro-government militias violated the human rights convention.
"People were peacefully rallying in the streets to show their opposition to the outcome of the election but, as we saw, they were shot at and many were killed. Many others were arrested," she said.
"The prisoners who were arrested after the election must be immediately freed.
"According to the constitution of the Islamice republic, peaceful rallying and demonstrations are allowed and do not need permission from any authorities."
Hundreds of people were reported to have been arrested after police used tear gas, water cannon and batons to disperse thousands of protesters gathering in central Tehran.
It was after this that reports about Neda began to emerge through the internet.
A video recorded on a mobile phone showed what appeared to be people attempting to save her life after she was apparently hit by sniper's bullet.
Ebadi said that the results of the election, which the two reformist candidates have complained was rigged, should be annulled.
"The people of Iran do not accept the outcome of the election, therefore ... a new election under the supervision of international institutions, including the United Nations [is needed]," she said.
The Guardian Council, Iran's highest legislative body, has said that there were some irregularities during the vote, but has ruled out a re-run of the election as demanded by the opposition candidates.