Citing a senior member of Abe's Liberal Democratic Party, national broadcaster NHK said: "Former Prime Minister Abe died in a hospital in the city of Kashihara, Nara, where he was receiving medical treatment. He was 67."
The death was also reported by other broadcasters, as well as Japanese news outlets Jiji and Kyodo.
The assassination of the country's best-known politician comes despite Japan's strict gun laws and during the campaign leading up to Sunday's upper house elections.
Former Prime Minister Fumio Kishida left the campaign trail and flew by helicopter to Tokyo, where he spoke to reporters in a voice shaking with emotion.
"Former Prime Minister Shinzo Abe was shot dead in Nara and I have been informed that he is in a very serious condition," he said.
"I pray that former Prime Minister Abe survives," he added, condemning "a barbaric act during the election campaign that is the basis of democracy."
It's absolutely unforgivable. I condemn this act in the strongest possible terms.”
The attack happened before noon in the country's western region, Nara, where 67-year-old Abe had made a blunt speech in the presence of security forces, but bystanders were able to easily approach him.
Footage broadcast by NHK showed him standing on a stage as a man in a gray shirt and brown trousers approached from behind before pulling something out of a pocket and shooting.
At least two shots appear to have been fired, each producing a puff of smoke.
As viewers and reporters ducked, a man was shown being dragged to the ground by security forces. He was later reportedly arrested on suspicion of attempted murder.
Local media, citing police sources, identified the man as 41-year-old Tetsuya Yamagami, with multiple outlets describing him as a former member of the Maritime Self-Defense Force, the country's navy.
He was carrying what local media described as a "handmade gun," and NHK said he told police after his arrest that he was "targeting Abe to kill him."
big bang
Witnesses at the scene described the shock as the political event turned to chaos.
"The first shot sounded like a toy bazooka," one woman told NHK.
"He didn't fall and there was a big bang. The second shot was more visible, you could see the spark and the smoke," she added.
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