* Legislation aims to pay victims, give back stolen land
* President Santos expected to sign victims law at weekend
* At least 12 land campaigners killed in last two years
By Luis Jaime Acosta
BOGOTA, June 8 (Reuters) - A gunman shot dead a Colombian rights leader campaigning for the return of land snatched by illegal militias, police said on Wednesday, just days before a new land reparations law was set to come into effect.
Latin America's No. 4 oil producer has endured more than 40 years of violence from guerrillas and drug runners, and while some fighting and killings continue, the country has seen the conflict subside over the last decade.
Police said that the gunman killed Ana Fabricia Cordoba, 51, on a local bus in Medellin in the Antioquia province, 220 km (136 miles) northwest of the Colombian capital.
Cordoba was a leader of a group trying to protect the rights of people displaced by the war and worked for land restitution after her husband was murdered by an armed group.
At least a dozen leaders of land restitution movements have been killed in the last two years, rights groups say.
Colombia's Congress passed a victims' law at the end of May that opens the door for reparations and aims to return millions of acres of land to displaced people.
President Juan Manuel Santos says he plans to sign the bill into law when U.N. Secretary General Ban Ki-moon visits the Andean nation on Friday. [ID:nN24295543]
Once seen as a failing state, Colombia is trying to pull itself out of a vicious cycle of rural violence that has displaced 3.6 million people, killed tens of thousands and starved hit oil, mining and agriculture investments.
A key aspect of the victims bill is giving back land taken from peasants by heavily-armed paramilitaries, drug lords and ranchers -- that may take a decade. [ID:nN25183324]
Lawmakers say 4 million hectares (10 million acres) of land were abandoned and 2 million additional hectares were taken by illegal armed groups over the last few decades.
Experts say the victims law will face practical challenges such as institutional deficiencies and also the threat of violence against previously displaced people who want to return to land stolen from them. (Writing by Jack Kimball; Editing by David Lawder)