"We mourn the death of the Emir of Ansar al-Sharia Sheikh Mohamed al-Zehawi," the group said in a statement, without giving details about the time or circumstances of his death.
Zehawi's fate has been a mystery since the October clashes between pro-government forces and Islamist militias in the eastern city of Benghazi in which dozens died.
Ansar al-Sharia is classified by the United States and the United Nations as a terrorist organisation. It has branches in Benghazi, in the eastern city of Derna, and in Sirte, in central Libya.
Zehawi "was killed in Benina clashes near the Benghazi airport, southeast of the city," the Islamist militias February 17 Martyrs and Rafallah al-Sahati Brigades said on Facebook on Saturday.
A source at the shura council of Benghazi rebels also confirmed his death to AFP saying "Zehawi was killed in the Benina clashes on October 11".
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"He was buried in Sirte (west of the city) after efforts to save his live failed because he had received a direct hit in the chest and was suffering from diabetes," the source added.
An army officer, who did not wish to be named, said the military learned of Zehawi's death from an "Ansar al-Sharia militant who was made prisoner and who confirmed the news".
Islamist websites have also posted pictures allegedly showing Zehawi dead and another one purportedly of him in a shroud.
Zehawi, who was jailed under the regime of dictator Moamer Kadhafi, took part in the 2011 uprising that toppled and killed the strongman.
He had also fought in Al-Qaeda ranks in Afghanistan.
Washington believes the group is responsible for the 2012 attack on the US consulate in Benghazi that killed the ambassador and three other Americans.
In November, the United Nations blacklisted Ansar al-Sharia Benghazi and its sister group, Ansar al-Sharia Derna, over links to Al-Qaeda and for running camps for the Islamist State group.