Military chief of staff Gen. Eduardo Ano said that soldiers recovered and identified the remains of Moammar Askali at the scene of the battle in a coastal village on Bohol Island.
Askali was involved was involved in the beheadings of two Canadians and a German who had sailed.
According to the military chief, Askali and his fighters had sailed far from their southern jungle hideouts to capture more hostages.
Ano said captured Abu Sayyaf extremists identified Askali from a photo of the militant taken by the troops who killed him.
Askali, who used the nom de guerre Abu Rami, had partly served as the terror group's spokesperson in recent years.
"This is a major blow to the Abu Sayyaf," Ano told the Associated Press, adding that if the terrorist group had plans to kidnap more innocent people, the recent events would give them pause.
Askali was a rapidly rising hard-line leader of the Abu Sayyaf, who had also pledged allegiance to the Islamic State group.
The young terror mastermind had received bomb-making training from Malaysian Zulkifli bin Hir, one of the top militant leaders in Southeast Asia was killed in 2015.
This was Abu Sayyaf's first know attempt to carry out ransom kidnappings deep in the heart of Central Philippine, far from the group's jungle hide-outs in the southern provinces of Sulu and Basilan.
During the battle, five other Abu Sayyaf militiamen, three soldiers, and a policeman were also killed.