A self-styled commander and India coordinator of Pakistan-based Lashkar-e-Tayiba was killed after a two-hour long gunbattle in Doda district early on Wednesday morning.
A woman who was used by the militant as a human shield also died in the incident.
Abu Umar, who coordiantes LeT operations in India, was killed during a search operation by police and Rashtriya Rifles personnel which took place in Banderwah area of the district, Senior Superintendent of Police Manohar Singh Gill told PTI.
Umar was responsible for the killing of Deputy Superintendent of Police Shailey Singh during an operation in Baderwah area on May 31, he said.
A laptop which contains details about LeT's activities in the country and large quantity of arms and ammunition have been recovered, police said.
Acting on information provided by Intelligence Bureau, security personnel cordoned off Haweli Mohalla at around 4 am and asked the ultras holed up in a house to surrender.
The militants then opened fire at the search party and in the ensuing gunbattle, which lasted for about two hours, Umar was killed, police said.
A woman identified as Shameela Begum, used by Umar as a human sheild, was also killed in the gunbattle, they said.
Senior police officials in Delhi said Umar was wanted in connection with several failed terrorist plots in Delhi and his name last came up after the arrest of three militants from Dilli Haat in April.
"Abu Umar had sent the three militants, including a Pakistani, to Delhi with explosives to carry out strikes," Deputy Commissioner of Police (Special Cell) Alok Kumar told PTI.
After arresting Abu Qasim, Shafaqat Iqbal Mir and Shabbir Ahmed on April 26, police had claimed that the whole operation was planned by Abu-al Qama, the mastermind of the 2005 pre- Diwali blasts in Delhi.
Police had recovered two kg of RDX, three electronic detonators, an electric timer and two hand grenades from the trio.
Shafaqat and Shabbir, residents of Doda in Jammu and Kashmir, were working on the instructions of Umar, Kumar said.
Both Qasim and Umar were working for Abu-al Qama, he added.