China's official Xinhua news agency reported the killing, quoting Chinese embassy sources.
But earlier on Thursday Pakistani officials said their forces had freed the two engineers who had been held in the remote South Waziristan tribal region bordering Afghanistan since Saturday.
All five of the captors were killed in the operation in the South Waziristan tribal region and one of the Chinese hostages was wounded, Major-General Shaukat Sultan said on Thursday.
"The security forces conducted an operation and both of the Chinese engineers have been freed," he said.
"One of the Chinese is absolutely safe, the other one has been hurt," he said, but did not specify the extent of his injuries, adding that he was "still getting details".
Engineers Wang Ende and Wang Peng had been working on Pakistan's Gomal Zam dam project for China's state-run Sino Hydro Corp.
The captors, with explosives strapped to their bodies, had been holed up in a mud house surrounded by security forces and their tribal allies in the Chagmalai area, about 330km south-west of Islamabad.
Officials said at least two appeared to be Arabs and they had threatened to blow themselves and their captives up if any rescue attempt was made.
The rescue operation took place
in the South Waziristan region
The tribal region has long been notorious for kidnapping for ransom, but the latest abductions appear to represent a shift in tactics by armed fighters.
China - a traditional ally of Pakistan, supplying it with arms and hundreds of millions of dollars in development finance - had urged Islamabad to do its utmost to rescue the engineers.
It has also called for an increase in security for their co-workers.
In May, three Chinese technicians working on a port project were killed and nine wounded in a bomb attack in the southern Pakistani city of Gawadar.
The latest capture was led by an al Qaida-linked tribesman named Abd Allah Mihsud, a former inmate of the US military prison at Guantanamo Bay in Cuba.
Mihsud, who was hiding out in a separate location from the captors, threatened on Monday to order the killing of one of the captives unless the captors and the captives were allowed to join him.
The tribal region is notorious for
people kidnapping for ransom
The military assault on the captors came after efforts by members of his tribe, including some of his relatives, failed to persuade him to order the release of the captives.
Officials have said Mihsud had demanded an end to military operations in the semi-autonomous tribal region, where hundreds have been killed this year in battles between troops
and al-Qaida linked fighters.
He also wanted the release of two Uzbek fighters.