Mullah Abdul Manan Akhund was the Taliban's "governor" and military chief for the southern Helmand province.
He was killed in the Nawzad district of Helmand on Saturday night, provincial officials said.
The Taliban said his death was a "major loss" but it would not deter them in their efforts to take back control of Afghanistan.
But Afghan interior ministry spokesman Najib Danish told the AFP news agency his death was a major blow to the Taliban and would "lower the moral" of its fighters in southern Afghanistan.
Helmand is where British troops were based for eight years before ground troops were withdrawn in 2014. Large parts of the province are now back under Taliban control.
BBC research earlier this year showed Taliban insurgents control more territory in the country than at any time since 2014.
It is estimated that about 15 million people - half the population - are living in areas that are either controlled by the Taliban or where its fighters are openly present and regularly mount attacks.
However, there have been intense efforts to persuade the Taliban to begin peace talks to end the fighting. It sent delegates to a meeting in Russia last month to discuss the issue, but has refused to hold direct talks with the Afghan government.