Mr Sharma was jailed last September for allegedly conspiring to kill a BJP functionary under the Khoda Police station, police said.
The district administration imposed the National Security Act on Mr Sharma on Tuesday based on the report of the district police chief.
District Police chief HN Singh said the police had sent its report to book Mr Sharma under the NSA as it was suspected that he might create law and order problem if he gets bail.
According to Mr Singh, the district magistrate Ritu Maheshwari has sent the report of imposing NSA on Mr Sharma to the state government for its approval.
Thereafter the report will be sent to High court advisory board Allahabad, and after the consent of board NSA will be enforced.
Mr Sharma's family members and supporters said they will challenge the NSA before the government, the high court advisory board and thereafter will approach Allahabad High Court to seek relief.
In case NSA is confirmed, Mr Sharma will have to remain in jail for one year, officials said.
Mr Sharma had surrendered in a court on 18th October in a district court in connection with the case of murder of BJP leader Gajendra Bhati, who was gunned down by two armed assailants in Khoda on September 2.
Another BJP local functionary, Balbir Chauhan, was injured in the incident.
After a few days of the killing, the police had arrested Narendra Gurjar, alias Fauji, and Raju Pehalwan.
The duo told the police Sharma had given them a contract of Rs 10 lakh to eliminate his political rival Gajendra Bhati.