Police chief General Oscar said 'Cuchillo' likely drowned since an autopsy found no gunfire wounds on his body [Reuters]

One of Colombia's most wanted drug lords has been killed in an operation by police and the air force, President Juan Manuel Santos has said.

Santos announced at a news conference on Wednesday that "the king of killers has fallen", confirming the death of the man knicknamed "Cuchillo" (Knife) for using the weapon to mutilate his victims.

Cuchillo, whose real name was Pedro Oliverio Guerrero, died during a raid in southern Colombia on Christmas Day.

Two police officers were also killed during the operation, which began on December 24.

Santos called Guerrero's death "the greatest blow dealt to criminal organisations," and warned other criminals that they would face a similar fate.

On Tuesday, authorities said they found a body with characteristics matching those of Guerrero about 320km southeast of the capital, Bogota, but needed to conduct the necessary tests before confirming his identity.

Colombian authorities had offered a $2.5m reward for information leading to his capture. The money will be paid to several informants who helped with the investigation, Santos said.

Police director General Oscar Naranjo said Guerrero likely drowned, since an autopsy did not find gunfire or blade wounds on his body.

Guerrero was an ex-paramilitary leader who ran a drug gang called the Colombian Revolutionary Popular Antiterrorist Army.

The gang operated primarily in the eastern plains of Colombia between Bogota and the Venezuelan border, where they protected coca crops and drug trafficking routes in eastern Colombia, according to US officials.

Authorities found Guerrero with two pistols and a knife, which he reportedly used to slash the throats of his victims.

"That knife is a silent witness to at least 3,000 killings, ordered or executed, by this Colombian criminal who has finally fallen," Santos said.

Colombia remains the world's leading cocaine producer with both left-wing rebels and right-wing former paramilitaries involved in the drug trade.