Security sources believe specially-trained IRA snipers, using long-range weapons that can pierce body armour, are operating in South Armagh.
The soldier was hit in the chest by a single bullet as he patrolled Carron Road, Crossmaglen, South Armagh, at 1.30 pm. He was flown to hospital in Newry, but doctors were unable to save him. His name will be released after his relatives have been told.
Terrorists have previously used the American-made Barrett 'Light Fifty' rifle which can hit a target more than a mile away with a heavy-calibre bullet travelling at nearly 2,000mph.
Yesterday's killing, however, is understood to have been carried out using a different type of high powered rifle. As in previous attacks, the sniper needed only a single bullet and was able to escape before soldiers had a chance to return fire.
Two weeks ago, Private John Randall, 19, was killed by a single shot while on foot patrol, near Newtownhamilton, close to the South Armagh border. In March, L/Cpl Lawrence Dickson, 26, was struck by a sniper while patrolling in Forkhill, about 40 miles from Belfast.
In February, an RUC constable, Jonathan Reid, 30, was killed by a sniper while on patrol just outside Crossmaglen.
A soldier who was killed in Crossmaglen last August was the first to be hit in a long-range attack. An RUC officer on traffic duty in Belcoo, Co Fermanagh, was also killed by a sniper last November.
There is growing evidence suggesting several IRA killers could be operating out of the Republic, using the Barrett as well as Kalashnikov AK-47 assault rifles.