"The face-off between the ultras and the joint group of security personnel from state police and Andhra Pradesh took place in the forests under Maraigudi Police Station limits this morning," Sukma Additional Superintendent of Police Neeraj Chandrakar told PTI over phone.
The killed Naxals have been idenfitied by security agencies as Ramu and Naresh.
Naresh, of local 'shabri dalam', operating in the Chhattisgarh-Andhra Pradesh axis, carried a reward of Rs 5 lakh on his head and was wanted in many cases by the police of both the states, they said.
"On seeing the police-team near Bade Telma village forests, rebels opened indiscriminate fire on the team, which was returned by police, leaving two Naxals dead," Chandrakar said, adding the Naxals fled into the jungle as police retaliated with heavy firing.
Later, security forces recovered bodies of the two and two SLR rifles from the encounter spot, he said.