Police and security forces killed one terrorist in the encounter in Budgam district, Kashmir Zone Police said on Monday.
Arms and ammunitions were recovered from the killed terrorist by the team of security forces and police.
The police are making efforts to identify the terrorist and find out which group he was affiliated to.
"Budgam Encounter Update: 1 terrorist killed. Arms and ammunition recovered. Identity and affiliation being ascertained," Kashmir Zone Police's tweet read.
Further details are awaited.
Earlier on Sunday, three terrorists of Hijb-ul Mujahideen had been killed in an encounter that had broken out between police and security forces in the Tral region of Pulwama district.