The ministry said today army forces relied on local information to ambush a "leading terrorist responsible for many crimes" in a late night operation yesterday.
The militant, from the group Al-Qaida in the Islamic Maghreb, was killed in the mountainous Kabylie region, some 50 miles from the capital, Algiers.
Algeria has been fighting the group since the 1990s, though they are now isolated in a few mountainous regions.
Experts say locals in these regions have increasingly cooperated with government efforts to root out the last vestiges of the group.