Walter Arizala, known as “Guacho”, led a few dozen guerillas from the former Revolutionary Armed Forces of Colombia (FARC) group.
The US backed an effort to trace him following the kidnap and murder of three Ecuadorian journalists earlier this year.
In a TV address, Colombia’s president Ivan Duque revealed Arizala was killed in a “heroic operation” carried out by a special forces unit.
It means many Colombians “can now sleep peacefully because one of the most horrendous criminals our country has ever known has fallen”, the president added.
Arizala, 29, joined FARC as a teenager and had previously joined a peace process aimed at ending Colombia’s long history of political warfare.
However, he returned to the jungle last year and is believed to have been smuggling cocaine to Mexican drug cartels.
He was killed in the dense jungle border region of Narino, which is home to Colombia’s largest harvest of illegal coca plants.
Last year, land dedicated to the crop – used to make cocaine – soared to the largest amount on record at 807 sq miles, according to a White House report.
Colombia is the world’s biggest cocaine producer.
Arizala is believed to have ordered the abduction and murder of journalist Javier Ortega, 32, photographer Paul Rivas, 45, and their 60-year-old driver Efrain Segarra in March and April.
They worked for El Comercio, a daily newspaper in Ecuador’s capital Quito, and were covering a story about violence along the border.
The murders prompted both Colombia and Ecuador to order a military manhunt for their killers.
At least 15 deaths have been blamed on Arizala’s group, which is known as the Oliver Sinisterra Front.
Ricardo Rivas said he regretted Arizala died before revealing how his brother Paul was killed.
“I don’t think the death of another human being is something we should celebrate,” he told local radio.
Most FARC rebels disbanded under a 2016 peace deal, but more than 1,000 dissidents remain active.
They were founded in 1964 as a Marxist-Leninist force.
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