Sauce Walka was shot in Memphis on Saturday afternoon, but TMZ has learned he is alive and will recover.

Family for Sauce -- born Albert Walker Mondane -- tells us he is one of the two men who were shot outside a hotel near the FedExForum.

Sauce was shot in the leg and is currently in the hospital -- but he should make a full recovery. The family said it appears he was not the target of the shooting.

Another unidentified man who was with Sauce was shot and killed. His name has not been released.

We're out to Memphis police for more information ... so far, no word back.