Officials said on Friday his death marked the end of a series of clashes over several months that had left more than 200 rebels and troops dead.
"We can confirm that al-Huthi and tens of his supporters were killed today in morning fighting. This is the end of the rebellion," the official said.
Another government source told Aljazeera al-Huthi's body had been found after clashes with government forces.
The government had accused al-Huthi, leader of the Believing Youth group and a Shia Islam sub-sect, of setting up unlicensed religious centres and forming an armed group that has staged violent protests against the United States and Israel.
Yemen had offered a $54,000 reward for al-Huthi's capture, and in June security forces launched an operation to capture him in the mountainous Saada province, 240km north of the capital Sanaa.
Killed in fighting
Some of the rebel preacher's supporters were also killed while others surrendered, a joint statement from the Defence and Interior ministries said.
Extra security on the streets
of Sanaa after al-Huthi's killing
A Defence Ministry official said al-Huthi had been hiding with supporters in Jarf Salman, a village in the rugged mountains of Maran, in Saada province, and was killed in what marked the culmination of three days of intense fighting.
Jarf Salman had been under siege since late August as the army closed in on al-Huthi and his armed supporters.
Witnesses in the area told news agencies that clashes continued until late on Thursday between those still holed up and the army.
Yemen had been battling the cleric and his supporters since 18 June when the rebellion erupted, leaving more than 400 people dead on both sides.
Hundreds of al-Huthi's estimated 3000 supporters have also been detained.
The official statement said a ministerial committee was to be formed at the behest of President Ali Abd Allah al-Salih to assess the damage to the region after months of deadly clashes and to rebuild those areas destroyed.
Yemeni officials say al-Huthi's
death marks the end of fighting
The scores of people that fled their homes during the unrest have also been urged to return and resume life as normal.
Al-Huthi told AFP in July the conflict was a result of his anti-US stand and accused al-Salih of seeking "to please the United States at the expense of his own people".
"I am working for the propagation of the Quran and the fight against the United States and Israel," al-Huthi had said, rejecting government claims he was linked to foreign forces.
The self-styled Amir al-Muminin, or Prince of Believers, headed the Faithful Youth organisation, an offshoot of the Islamist opposition movement Al-Haq, formed in 1992.
Born in 1956 in Saada province and the son of one of the most influential Zaidi sect officials in Yemen, al-Huthi served as an MP in Yemen's parliament from 1993 to 1997.