USAID spokesman David Snider told CBS News that the official killed was 33-year-old John Granville of Buffalo, N.Y.
The shooting came a day after a joint U.N.-African Union peacekeeping force took over control in Darfur, Sudan's war-torn western region. Al Qaeda leaders, including Osama bin Laden, have called for a "jihad" or holy war, in Sudan against the peacekeepers in past messages.
But there was no immediate indication the attack was linked to those calls. Al Qaeda has shown little overt presence in the country in recent years since the Sudanese government threw out bin Laden in the late 1990s.
The attack was unusual in Khartoum. The Sudanese government often drums up anti-Western sentiment in media, but violence against foreigners is rare - and Westerners can even be seen some mornings jogging along the Nile.
Granville was driving in the Al-Riyadh neighborhood of the capital at around 4 a.m. when another vehicle intercepted his landcruiser, the Sudanese Interior Ministry said.
Gunmen in the car opened fire on Granville's vehicle before fleeing the scene, the ministry said in a statement. His Sudanese driver, 40-year-old Abdel-Rahman Abbas, was killed and Granville was shot in his hand, shoulder and belly. He underwent surgery but died, the ministry said.
Walter Braunohler, the public affairs officer at the U.S. Embassy in Khartoum, confirmed that "the American officer succumbed to his injuries and passed away."
He did not identify the diplomat, citing privacy rules, but said he worked for the U.S. Agency for International Development. Because of an ongoing investigation, Braunholer said he could not comment on any of the details of the attack provided by the Sudanese.
In Buffalo, New York, Granville's uncle, Daniel Granville, confirmed his identity. He said the family was too shaken early Tuesday to comment further.
The USAID web site said Granville was working in southern Sudan on a program to distribute radios and had previous worked on projects identifying community needs in the south.
Both U.S. and Sudanese officials said they were investigating the slaying.
The Foreign Ministry said the incident was "isolated and has no political or ideological connotations" and pledged to bring the culprits to justice in a statement carried by the state news agency SUNA.
The Sudan Media Center, which has close links to the government, cited an unidentified government official as saying the attack was criminal in motive and that there was "no grain of suspicion of an organized terrorist action."
Braunohler said it was "too early to tell" if the attack was terror related.
Humanitarian aid workers have come under increasing attack in Darfur by the region's multiple armed groups, but such attacks have not been known to take place in Khartoum - and there was no immediate indication Granville had worked in Darfur.
Buffalo-area congressman, Rep. Brian Higgins, said Granville, 33, "knew his life was in danger. He told his mom several times. I think she last spoke with him last evening or the day before, that it's dangerous, what he's doing, but he wouldn't want to be doing anything else."
Crime in Khartoum is much lower than in other east African cities like Nairobi, Kenya. However, anti-American sentiment runs high and officials here have lately stepped up their castigating of U.S. policies on Sudan. In November, a small protest was held after a British teacher at a Khartoum private school was arrested for allegedly insulting Islam by letting her students name a teddy bear Muhammad - she was sentenced to prison but quickly deported.
The shooting came a day after a new hybrid peacekeeping force took over in Darfur - a long-awaited change intended to be the strongest effort yet to solve the world's worst humanitarian crisis. Also on Monday, U.S. President George W. Bush signed legislation to allow states and local governments to cut investment ties with Sudan because of the Darfur violence.
In an April 2006 audiotape, bin Laden called on Muslims to fight U.N. peacekeepers if they deploy in Sudan, and his deputy Ayman al-Zawahri repeated the call in a video last September. Bin Laden was based in Sudan for several years, until the Khartoum government forced him to leave to Afghanistan, under pressure from the United States and Egypt.
Since then, there has been little sign of al Qaeda activity. Last year, for the first time, a group claimed to be al Qaeda's branch in Sudan when it claimed responsibility for the slaying of a Sudanese newspaper editor accused by some of blasphemy over articles run in his paper.
But the Sudanese government said the claim was fake and that the editor was killed by Darfurians angry over the paper's coverage of the conflict.
Al Qaeda was blamed in the 2002 shooting assassination of an American USAID officer, Laurence Foley, in Amman, Jordan.
Granville is the first U.S. diplomat to be killed in Sudan since the 1973 assassination of U.S. Ambassador Cleo Noel, slain along with senior embassy officer George Curtis Moore by the Palestinian Black September militant group.