Nek Muhammad, a former Taliban fighter who led fierce resistance to the Pakistan army's effort to flush out foreign fighters from the rugged tribal belt, died along with four others late on Thursday at the home of another tribal chief.
"We were tracking him down and he was killed last night by our hand," said Major General Shaukat Sultan. He was killed in the attack in Pir Bagh, near Wana, the main town in South Waziristan.
Muhammad's men are responsible for several deadly ambushes against the army and led a group of heavily armed holdouts during a March standoff that left more than 120 people dead.
He later agreed to cooperate with authorities, but reneged on promises to turn over foreign fighters, prompting the latest round of hostilities.
The area is considered a possible hideout for al-Qaida leader Usama bin Laden, though there is no hard intelligence on his whereabouts.
Muhammad's death marks a major victory for the Pakistani army, which has been embarrassed by its forces' heavy losses in fighting with the armed men.
Pakistan, a key ally of the United States in its "war on terror", has launched several operations in South Waziristan in the past year to flush out suspected al-Qaida fighters.
Hundreds of foreign fighters, including Arabs, Central Asians and Afghans, are still believed to be hiding there.
A major assault in South Waziristan ending early this week left at least 72 people dead, including 17 soldiers.