A terse statement on national radio stated 42-year-old Hachani had "succumbed to his wounds". But the potential repercussions of the assassination - the first of an FIS leader since the movement's creation in 1989 - are huge.
"Each time we see a ray of hope, a new tragedy befalls the country," said Abdelaziz Belkhadem, a former Parliamentary Speaker and close friend of the President, Abdelaziz Bouteflika.
No one immediately claimed reponsibility for the murder, and old suspicions resurfaced.
One was that Mr Hachani had been killed by the GIA, the ultra-hardline fundamentalist group opposed to the 1997 ceasefire called by the FIS and its military wing the AIS.
Another is that he has fallen victim to factional rivalry within the FIS, and a third theory is blaming the killing on hardliners in the army opposed to Mr Bouteflika's overtures and this year's partial amnesty to insurgents.
Hachani was known to have distanced himself from the president's plan for civil concord, amnestying Islamic militants who renounce violence and have not committed rape, murder, or planted bombs.
He became a major public figure in December 1991, after the imprisonment of the two top officials of the FIS, Abassi Madani and Ali Belhadj, when he led the party to win 188 of the 231 seats at stake in the legislative elections, virtually guaranteeing themselves power.
But the army, then as now the ultimate arbiter of Algerian affairs, stepped in to cancel the second round scheduled for January 1992, plunging the country into a civil war between government forces and Islamic radicals which has taken more than 100,000 lives.
Hachani was arrested on charges of inciting rebellion and freed only in July 1997. But recently his faith in the reforms of President Bouteflika had begun to wane, and last month he called for a summit summit of all interested parties to end the violence.
After a lull since last month, the killers have once more been about their business. In the past week 36 people - many of them women and children - have died in a series of attacks.Reuse content