Former Khiam prison guard and associate of Amer Fakhoury, Antoine Al-Hayek, was shot dead in the village of Mieh Mieh near the southern Lebanese port of Sidon on Sunday.
No one has claimed responsibility for Hayek's shooting. Local news outlet MTV reported that Hayek was shot by a silencer-equipped pistol from a close distance inside his local vegetable shop.
Al-Hayek, 58, was a member of the Israeli-backed Southern Lebanon Army (SLA), and worked as a warden in the Khiam Prison, alongside Fakhoury.
Local media outlets reported that Hayek and Fakhoury had been close while working together at the prison.
A former inmate at Khiam Prison, Hasan Hijazi, tweeted on Sunday that Hayek would flog prisoners with a whip and "turn detainees into a punching bag, and beat and kick them."
Hundreds of SLA members fled to Israel after 2000, including Fakhoury, fearing persecution if they stayed in Lebanon.
Hayek, however, stayed in Lebanon and faced trial. He was sentenced to 18 months in jail.
Lebanese Forces leader Samir Geagea said in a statement on Sunday that the death of Hayek is "a stab in the heart of the Lebanese state before anything else."
Adding that "it is totally unacceptable for a party, which is organised as the crime's details indicate, to assassinate the citizen Antoine Al-Hayek in broad daylight given that he had surrendered to the Lebanese judiciary and the Lebanese laws in the best way possible."
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The assassination comes three days after Fakhoury was airlifted from the US Embassy in Beirut and flown back to America.
Fakhoury had been detained since 12 September when he entered the country to visit family after more than two decades away.
The Lebanese-American was accused of torture and murder during his tenure at Khiam Prison, which Human Rights organisations have called a centre for torture.
Fakhoury was known as the "Butcher of Khiam," and at least 10 people are believed to have died while Fakhoury worked at the prison.
The Lebanese-American was acquitted of the charges on 16 March, but the ruling was later overturned, and a retrial ordered. A court order barring Fakhoury from leaving Lebanon for two months was announced on 18 March.
The US had pressured Lebanon to release Fakhoury by threatening to sanction the country, which is already struggling with a crippling economic crisis.
Senators Shaheen and Cruz tabled legislation which would sanction any Lebanese officials involved in the illegal arrest or detention of a US citizen.
After Fakhoury's release, US officials denied claims of a deal between Beirut and Washington and stressed that the Lebanese-American's freedom was secured by "competent judicial authorities."
Leader of the powerful Hezbollah militant group, Hassan Nasrallah, blamed US pressure for the move adding that Fakhoury's release is a "blatant violation" of Lebanon's sovereignty, and a "sad [day] for Lebanon and justice."