"Tamim Chowdhury is dead," said senior police officer Sanwar Hossain, referring to the Bangladeshi-Canadian suspected mastermind.
Three other suspected militants were killed by police during the raid.
The cafe attack began on 1 July when the militants entered the Holey Artisan Bakery in Dhaka.
They held hostages for 12 hours before police stormed the cafe, rescuing 13, killing six gunmen and arresting another.
Twenty hostages and two police officers were killed in the attack, the worst in the country`s history.
The so-called Islamic State claimed responsibility for the attack, but the government dismissed the group`s claim, saying it was the work of domestic militants from a banned Islamist group, Jamayetul Mujahideen Bangladesh (JMB).
"Tamim Chowdhury is dead," Mr Hossain said. "He is the... attack mastermind and the leader of JMB".
Police earlier engaged in an hour-long gun battle with extremists at Paikpara in Narayanganj, 25km (16 miles) south of Dhaka, he added.
Chowdhury returned to Bangladesh from Canada in 2013.
Bangladesh `cafe attack planner killed` in police raid
27 August 2016
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Bangladeshi police say they have stormed a hideout near Dhaka and killed the suspected planner of a cafe attack last month that left 22 people dead.
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