Canada on Monday accused India's government of involvement in the killing of a Canadian Sikh leader near Vancouver last June, and expelled New Delhi's intelligence chief in Ottawa in retaliation.

The diplomatic move sent relations between Ottawa and New Delhi, already sour, to a dramatic new low.

Prime Minister Justin Trudeau told an emergency session of the parliamentary opposition at mid-afternoon that his government had "credible allegations" linking Indian agents to the slaying of an exiled Sikh leader, Hardeep Singh Nijjar, in June in British Columbia.

"The involvement of any foreign government in the murder of a Canadian citizen on Canadian soil is an unacceptable violation of our sovereignty," Trudeau said.

He called "in the strongest possible terms" on the Indian government to cooperate in clearing up the matter.

Foreign Minister Melanie Joly said the Trudeau government had taken immediate action. "Today we have expelled a senior Indian diplomat from Canada," she said, without naming the official.

Joly said the expelled Indian is the head of the Research and Analysis Wing (RAW), India's foreign intelligence agency, in Canada.

Nijjar, whom India had declared a wanted terrorist, was gunned down on June 18 in Surrey, a suburb of Vancouver that is home to a major Sikh community. Canada has the largest population of Sikhs outside of Punjab, India.

Nijjar advocated for the creation of an independent Sikh state to be carved out of parts of northern India and perhaps part of Pakistan. India accused Nijjar of carrying out terrorist attacks in India, a charge he denied.

Tensions between India and Canada have been simmering over the unsolved slaying, and Indian unhappiness over how Ottawa has handled right-wing Sikh separatists.

New Delhi accuses Ottawa of turning a blind eye to the activities of Sikh nationalists who seek a separate Sikh homeland in northern India.

A former adviser to Trudeau, Jocelyn Coulon, asserted that Canada's accusation would have "the effect of a bomb around the world."

India will join "the group of nations that assassinate political opponents" abroad, much as Saudi Arabia orchestrated the murder of journalist Jamal Khashoggi in Turkey in 2018, said Coulon, who is now an independent researcher.

New Delhi did not immediately respond to Canada's charges. (AFP)