The incident occurred on Wednesday at Iyana-Ipaja Round About, at about 6pm.
The LASTMA official was said to have flagged him down for traffic issue.
The officer, it was learnt, got down and warned the traffic official never to stop him again, adding that he didn’t have right to do so.
In the course of exchanging hot words, the angry officer returned to his car, brought out a gun and shot the traffic official.
Many ran for safety after hearing the sound of the gun.
The officer, whose identity is yet to be ascertained, was said to have been arrested.
Eyewitnesses said the officer drove a Sport Utility Vehicle (SUV).
The alleged killer was first taken to Moshalashi Police Station along Ipaja Road before being transfered to State Command in Ikeja, GRA.
The traffic official was rushed to Ifako-Ijaiye General Hospital, where he was confirmed dead.
His remains have been deposited in a mortuary in Yaba, Lagos Mainland.
LASTMA Public Relations Officer Mahmud Hassan, who confirmed the incident to the Nation, said investigation is ongoing and that he will get the identity of both the dead traffic official and the officer that shot him.