Anisetti Murali (around 45-year-old), was attacked with sickles by the three assailants in his room when he was alone, they said, adding that he died on the spot.
The trio fled the spot and later surrendered themselves in Hanamkonda police station, sources said.
Mr Murali represented 44th division of the civic body as the corporator.
"It is not a political murder nor any business rivalry...the corporator was an accused in a case of murder of one Janardhan in 1991. He was today attacked and killed in retaliation," a senior police official told PTI.
One of the attackers is the son of Janardhan, the official said.
As per preliminary investigation, Mr Murali was killed over the old rancour, he said, adding further investigation is on.