The deceased was identified as Abdus Salam, 30, son of Hakim Ali of Jummapara in the upaizla.
Tipped off, a team of police conducted a drive in the area around 4 am, said Pradeep Kumar Sad, officer-in-charge of Teknaf Police Station.
Sensing presence of police, the criminals opened fire on them, forcing them to fire back in self-defense that triggered the gunfight.
At one stage, Abdus Salam was caught in the line of fire and suffered bullet wounds, he said.
Later Salam was taken to a local hospital where doctors declared him dead.
Abdus Salam had long been involved in human trafficking, said police.
Police also recovered one firearm, six cartridges and two shells of bullets from the spot.