The Counter Terrorism Department (CTD) killed the militants in a raid at a house in Shahkot area in Nankana Sahib district, some 70 kilometres from here, early today.
A source in the CTD said that the militants were members of the Tahreek-i-Taliban Pakistan (TTP) and they also had close association with the banned Lashkar-e-Jhangvi (LeJ).
"The terrorists were planing to target offices of the law enforcement agencies in Lahore," he said.
"When the personnel surrounded the house and asked the suspects to surrender they opened fire on them. The personnel returned the fire killing five terrorists on the spot," the official said, adding the other suspects managed to flee.
Ahuge quantity of explosives and weapons and banned literature were recovered from the house.
Nankana Sahib is the birthplace of Sikhism's founder Guru Nanak.