On 16 August 2015, Khanzada was assassinated in a suicide attack at his political office in Shadi Khan, Attock.

His son, Jahangir Khanzada, succeeded him as a member of the provincial assembly in by-elections on 6 October 2015 from the family's native constituency of PP-16, following Shuja's assassination.

[9] During his military career, Khanzada fought in the 1971 Indo-Pakistani war, served as an instructor in 1974–1978 and 1982–1983, and commanded the 13th Lancers in 1983–85.

[12][13] Khanzada was assigned the additional charge of the Home Ministry by the Pakistan Muslim League (N) provincial government on 14 October 2014, in a cabinet reshuffle.

[14] On 16 August 2015, Khanzada's home office in Shadi Khan was attacked in a suicide blast, killing him and at least 21 other people, including a number of his relatives.

[15][16] According to a preliminary investigation, the attack may have been retaliation for the killing of Lashkar-e-Jhangvi militant leader Malik Ishaq by the Punjab Police during Khanzada's term in office.