Jamal Humadi was driving home after delivering his Friday sermon in Saqlawiyah, 45 miles (75 kilometers) northwest of Baghdad, when a bomb attached to his car exploded, the official said. Two passengers were wounded.
Humadi was known for his opposition to al-Qaida and Sunni extremists, routinely calling on worshippers to turn away from sectarian violence that nearly tore the country apart two years ago.
Last week, Sunni cleric Bashir al-Juheishi was killed when a bomb attached to a car - known as a sticky bomb - exploded in Mosul as he left a mosque there.
Al-Juheishi also was known for taking a stance against al Qaida in Mosul, a city the U.S. military has called the last urban stronghold of the group.
The latest attack came as the military spokesman for Baghdad security warned that insurgents were using booby-trapped cans of food and toys to carry out targeted attacks.
"Booby-trapped cans are being used to carry out assassinations because they can be used as sticky bombs," said Maj. Gen. Qassim al-Moussawi. "They can be easily attached to any car or bus to target specific people."
Al-Moussawi issued the warning on a government Web site, saying Iraqi security forces found a small bomb-making facility in western Baghdad with explosive-laden cans and toys.
"There appear to be toy bombs," he said, security forces discovered toy guns packed with explosives at the factory.
Earlier this year, the U.S. military said it seems insurgents are recruiting teenagers, between the ages of 14 and 19, for grenade and suicide attacks.
The military has frequently said it believes al-Qaida in Iraq and other insurgent groups are recruiting children and women because of they easily get away from scrutiny and evade heightened security measures.
Though there have been no recent reports of teens attacking security forces, al-Moussawi said troops were not ruling out the future possibility that insurgents would attempt to mobilize children to carry out attacks.
Associated Press Writers Bushra Juhi and Chelsea J. Carter contributed to this report.