Bagga Singh, who carried a bounty of Rs 50,000 over his head, was killed in the encounter with the STF team led by Assistant Superintendent of Police Vishal Vikram Singh near Bairiya village here, police said.
Kheri SP S Channappa and STP ASP Singh said the encounter took place in the wee hours when Bagga Singh and an accomplice were going on his bike along the canal road near the Dulhi siphon and several rounds of fire were exchanged.
A pistol, some ammunition and the bike were recovered from the encounter spot.
Bagga Singh was rushed to a health centre but was declared brought dead.
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Channappa said police teams were combing the area to nab the absconding accomplice.
Bagga Singh had been operating in areas such as Nighasan, Dhaurahra, Lakhimpur, Tikonia and other police station areas since 2009. He was accused of carrying out killings, loot, extortion and abductions.
The Kheri police had nabbed him in 2013, but he escaped from police custody on his way to court. He had allegedly shot dead a police constable while fleeing.