The deceased was identified as Mohammad Tajel, 36, son of Din Islam Khorshed of Baghorar Rudrapara village.
Tajel was convicted to seven years' jail in a robbery case and also an accused in 10 other cases.
Md Yunus Ali, officer-in-charge of Sreenagar police station, said a team of police arrested Tajel from Monirampur upazila in Jashore on Friday at 10:30am.
Acting on his information, a team of police conducted a drive at Madankhali around 11 pm to recover arms.
When the team reached the area, his associates attacked the police and Tajel tried to flee, said the OC.
After a gunfight, police recovered his bullet-ridden body from the spot.
Police also recovered a pistol, three bullets and 100 Yaba pills from the spot.
Three policemen were also injured in the incident, the OC said.