Two policemen have been arrested in connection with the incident, sources said.
As violence erupted in several parts of the Valley, fuelling tensions further, state police personnel opened fire to disperse protesters at Narbal in Budgam, wounding three, including a 16-year-old boy.
The injured were rushed to a hospital here where Suhail Ahmed Sofi died.
Earlier reports had said the boy was killed in firing by the CRPF.
"Additional Deputy Commissioner has been asked to probe the incident that led to the death of the boy. He has been asked to submit a report within 15 days," District Magistrate Budgam Mir Altaf Ahmad said.
A controversy erupted over the killing of the boy with the police admitting that their personnel had prima facie not followed the standard operating procedure at the time of the incident. Exactly how they violated the SoP was not yet known.
"The preliminary inquiry into the incident indicated that the forces have acted in violation of the laid down Standard Operating Procedures (SOPs)," a police spokesman said.
He said a case under Sections 302 (Murder), 147, 149, 341 and 427 RPC has been registered at Magam police station.
"We regret the unfortunate incident and extend our sympathies to the bereaved family," the spokesman said.
The family of the deceased claimed he was detained before being shot.
"Suhail was first detained and asked questions before he was shot dead," Tariq Ahmad Sofi, uncle of the deceased, told reporters at their family residence.
Sofi, quoting eyewitnesses, alleged "Forces took my nephew aside and then shot him point-blank."

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