According to police, the security forces launched an operation on Friday morning following an information about the presence of a wanted LeT commander hiding in Gulzarpora village.
"The security forces were fired upon after they closed on the house where Muzaffar Ahmad Naiku ali alias Muza Molvi was hiding," the police said.
"The militant was killed in the encounter which has ended now.
"Searches are still going on in the area."
The police said the slain commander was one of the longest surviving militants and the most wanted guerrilla in Jammu and Kashmir.