The OSCE has been monitoring the region since Ukrainian government forces and Russian-backed separatist rebels agreed to a ceasefire in Minsk in February 2015.
The Organization for Security and Cooperation in Europe said on Sunday that one of its staff was killed after a monitoring mission patrol vehicle hit a mine in rebel-held eastern Ukraine.
The unarmed, civilian OSCE mission with more than 700 international observers was deployed in 2014. The role of the monitors includes verifying the withdrawal of heavy weapons as agreed under a 2015 ceasefire agreement.
"Tragic news from #Ukraine: SMM patrol drove on mine. One #OSCE patrol member killed, one injured," Sebastian Kurz, the Austrian foreign minister and the OSCE's current chairman, wrote on Twitter.
The Ukrainian military said the incident took place at 10:17 local time (0717 GMT) near the small village of Pryshyb near Luhansk, which is controlled by pro-Russian separatists.
Thousands of people have been killed since fighting broke out in eastern Ukraine in April 2014, after the deposing of pro-Russian leader Viktor Yanukovych, who fled the country following pro-EU protests in Kiev.
The crisis led to the autonomous government in Crimea, which is dominated by ethnic Russians, to declare independence from Ukraine and eventually be annexed by Russia following a referendum.
Western nations punished Russia by enforcing crippling economic sanctions. The sanctions, however, may be lifted if Russia sticks to its side of the ceasefire agreement.
Although the ceasefire has largely held since the agreement, skirmishes often threaten to destabilise the region.