On Wednesday night, two men fired nine shots from their vehicle into the auto that Franco and her driver, Anderson Pedro Gomes, were in, killing them both, according to Reuters.
Ms Franco was returning from an event encouraging black women's empowerment in central Rio when a auto drew alongside hers and nine shots rang out.
Her driver was also killed and an aide was injured in the fusillade.
Over the weekend, Franco called for "no more killing of young men" after the deaths of two young men in the local Acari favela.
The deployment of Brazil's military - which security analysts say has so far failed to make any obvious difference - was strongly criticized by Franco who feared this would lead to still more bloodshed and human rights abuses. She was recently appointed rapporteur of a municipal commission to monitor the federal intervention in policing Rio de Janeiro.
She was elected to the City Council with more than 46,000 votes, a remarkable showing for a fresh face on a ballot.
Franco grew up in Maré-a complex of 16 favela communities and one of Rio's largest slums-and has been an outspoken advocate for favela residents denouncing police aggression. Matheus Melo was leaving church when he was killed.
"She broke barriers that many black women in the periphery thought were intractable", said Ilona Szabó, executive director of Igarapé Institute, which studies public safety policies.
Crowds gathered in Rio, Sao Paulo and several other cities on Thursday night, bearing banners calling for justice and an end to Brazil's endemic violence.
Ms. Franco was an expert on police violence and had been put in charge of a commission at City Hall meant to monitor the military intervention.
The military intervention has sparked widespread concern, including from UN High Commissioner on Human Rights Zeid Ra'ad al Hussein, who said soldiers "are not specialised in public security or investigation". He delayed a previously-scheduled event at the presidential palace to hold a cabinet meeting on Rio's security, and said the federal police was willing to help with the investigations.
Flowers, pictures and condolence messages are amassing outside the city council offices, paying tribute to a charismatic young woman with a long record of championing social causes in a metropolis plagued by issues of violence, race and poverty. Finance Minister Henrique Meirelles, who is contemplating a bid for the presidency, said the assassination underscored the need of the Rio military operation.