The militant identified as Tariq Lone alias Azhar was killed in the two hour long gunbattle with the army.
Police said that gunfire started after Azhar fired at the army who launched a search and cordon operation in Nawapachi area of the district on that day following a tip-off.
The troops recovered one AK rifle, one pistol, grenades and a radio set from the site of the encounter.
Lone was in the security forces' wanted list for his involvement in various militant activities, including murder of the Gul Mohammad, senior leader of of the ruling National Conference in 2009.
On January 19, he managed to escape after his hideout was busted by the troops in Mathwah area of the district and the troops have looking for him ever since.