In what afterlife would end that character?

[Conradine]

He's a great master of martial arts, successor of an extremely powerful and elitist school.
His master was his adoptive father and he loved him. But the school rules dictated that the new master must kill the former in a deadly duel, so his adoptive father bandaged his eyes and tricked him into a fight.
The young master prevailed but was shocked and in horror at having killed his master and swore to erase love from the world.

The martialist, now a power hungry dictator, did many heinous things like forcing children to build and huge monument to him and mercilessly crushing rebel resistance by going so far as letting them find poisoned supplies.

Finally he's defeated by the young master of a rival school and left to choose the place where he can die. He crawls into the funerary chamber of his long lost master, crying tears of sorrow and repentance. He wish he could get a last caress from his father and dies, spiritually returning a child.

What will be his final destination?

[ExLibrisMortis]

D&D alignment runs on plot necessity at least part of the time, and this is one of those times.

Maybe Acheron is a good fit. Eternal pointless conflict, LN-with-evil-leanings.

[Psyren]

He wish he could get a last caress from his father and dies, spiritually returning a child.

You lost me at the bold part. Is he getting a do-over? Did he get reincarnated/remade?

[hamishspence]

The martialist, now a power hungry dictator, did many heinous things like forcing children to build and huge monument to him and mercilessly crushing rebel resistance by going so far as letting them find poisoned supplies.

Finally he's defeated by the young master of a rival school and left to choose the place where he can die. He crawls into the funerary chamber of his long lost master, crying tears of sorrow and repentance. He wish he could get a last caress from his father and dies, spiritually returning a child.

Sounds like LE followed by "deathbed repentance" but no actual atonement.

As such, the perfect candidate for reincarnation as a Hellbred (Fiendish Codex 2), where he can atone for the deeds he wasn't able to atone for the first time round.

[KillianHawkeye]

Sounds like he's going to Hell to me....

[hamishspence]

Hellbred go to Hell regardless of their actual alignment, unless they have atoned for their crimes committed in their previous life. And this is quite difficult - most Hellbred fail. So yes, this character, even with a second chance, is probably going to Hell in the end.

[TheYell]

As of this morning I vote for the Endless Slope of Pain

[Psyren]

As of this morning I vote for the Endless Slope of Pain

Gehenna is NE leaning lawful so you're not far off actually