Co-operatives and Rural Development Minister Jimmy Lemi Milla was killed by a former employee, said Philip Aguer of the Sudan People's Liberation Army.
The assailant also killed a bodyguard and was then arrested.
The incident comes only days after referendum results confirmed that Southern Sudan would become the world's newest independent state on 9 July.
Nearly 99% of southerners voted for secession in last month's poll. Sudanese President Omar al-Bashir has said he will accept the outcome.
Officials in the ruling Sudan People's Liberation Movement (SPLM) believe the motive for Wednesday's shooting was personal rather than political.
But the BBC's Peter Martell in Juba says it is a clear sign of the security challenges ahead for Southern Sudan as it moves toward its full independence.
Shock The killing has dampened the excitement of the referendum resultCol Aguer said the attacker was a former employee of the minister and believed to be related to him by marriage.
Our reporter says Mr Milla arrived as usual at his office in the centre of town in the government ministry complex.
But his bodyguard left his pistol in his car and the disgruntled former employee smashed the window, grabbed the weapon and went inside to shoot the minister.
It was first reported that the killer shot himself, but it has later emerged that he was arrested by police.
Our correspondent says there is shock in Juba that the shooting could have happened right in the centre of the city and at the hub of government.
The killing has also dampened the excitement in Juba following the announcement of the referendum results this week, he adds.
Milla was a former supporter of the northern ruling party, but switched allegiance to the SPLM after 2005, when the Comprehensive Peace Agreement (CPA) was signed to end two decades of civil war.
Although the referendum was peaceful, tension remains high in parts of the oil-rich area which straddles the north and south. Fifty people were killed over the weekend in fighting in Southern Sudan's Upper Nile state.
Show regionsThe great divide across Sudan is visible even from space, as this Nasa satellite image shows. The northern states are a blanket of desert, broken only by the fertile Nile corridor. Southern Sudan is covered by green swathes of grassland, swamps and tropical forest.
Sudan's arid northern regions are home mainly to Arabic-speaking Muslims. But in Southern Sudan there is no dominant culture. The Dinkas and the Nuers are the largest of more than 200 ethnic groups, each with its own traditional beliefs and languages.
The health inequalities in Sudan are illustrated by infant mortality rates. In Southern Sudan, one in 10 children die before their first birthday. Whereas in the more developed northern states, such as Gezira and White Nile, half of those children would be expected to survive.
The gulf in water resources between north and south is stark. In Khartoum, River Nile, and Gezira states, two-thirds of people have access to piped drinking water and pit latrines. In the south, boreholes and unprotected wells are the main drinking sources. More than 80% of southerners have no toilet facilities whatsoever.
Throughout Sudan, access to primary school education is strongly linked to household earnings. In the poorest parts of the south, less than 1% of children finish primary school. Whereas in the wealthier north, up to 50% of children complete primary level education.
Conflict and poverty are the main causes of food insecurity in Sudan. The residents of war-affected Darfur and Southern Sudan are still greatly dependent on food aid. Far more than in northern states, which tend to be wealthier, more urbanised and less reliant on agriculture.
Sudan exports billions of dollars of oil per year. Southern states produce more than 80% of it, but receive only 50% of the revenue, exacerbating tensions with the north. The oil-rich border region of Abyei is to hold a separate vote on whether to join the north or the south.
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