There are few occasions on which you can kill the sniper (M7,10) - from the position where he is standing, he has a narrow overview of the town. But, since you already are on the road by the town, it is a good idea to approach him and deal with him up close.
You can even take him down using the pistol, after you approach the yard from the northern gate, or climb onto the rooftop and eliminate him silently. Just watch out for the mines planted on the stairs.
Another way to eliminate him is across the window of one of the buildings to the south, at the waterside. The distance from there is 200 m.
After you have killed the enemy sniper and completed primary objectives, walk to the yard in front of the building that the target was in (M7,11) to end the mission...