Ayad al-Jumaili, was wiped out by the country's air force along with other leaders of the terror group, in the region of al-Qaim, near the border with Syria.
Jumaili is believed to be second-in-command to leader Abu Bakr al-Baghdadi.
Iraqi State TV announced the death, citing the country's military intelligence.
It's understood that Jumaili, from Fallujah, was the head of the terror group's internal security unit.
He was previously an intelligence officer in the Iraqi army until 2003.
Iraqi TV said Jumaili was killed with other Islamic State commanders in a strike carried out by the Iraqi air force in the region of al-Qaim, near the border with Syria. It gave no detail or date for the raid.