Acting a tip-off, personnel of 10th Assam Rifles battalion surrounded the militants in Kangchup and Singda dam area in Senapati district during which they fired upon them.
The security personnel also returned the fire, triggering a brief gun battle, which ended with the killing of the ultras, they said.
The para-military forces were continuing the search operations to nab the remaining militants who reportedly escaped through nearby hill areas.
Meanwhile, four AK-47 rifles, one A3 rifle, one M16 rifle and some rounds of ammunitions were found at the spot, sources said, adding that KNF was one of the signatories of suspension of operation (SOO) agreement under which the government forces suspended operation against them.
Under the SOO agreement, the militants were expected not to move around with arms and not to extort money from general public, the sources said.
The SOO signatories, particularly Kuki militant outfits, who have been demanding formation of a 'Kukiland' by breaking up of 22,327 sq km Manipur, had been asked to confined themselves at particular designated camps which were set up by the government.
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