Police said that the incident took place at Talegaon Dabhade, about 40 km from Pune.
The 38-year-old social activist, who was on his morning walk when he was attacked, reportedly died on the spot.
The social activist was known for his involvement in the anti-corruption campaign launched in Maharashtra.
The movement was launched by Anna Hazare with the help of the Right to Information (RTI) act.
In Pune, Shetty fought against irregularities in land transactions in Maval taluka.