Zhou Kehua, 42, was cornered in an alley behind a shoe shop in the central city of Chongqing and opened fire on police, according to China Central Television (CCTV).
The fugitive was shot in the head at close range, according to the report. At least one policeman was “lightly injured” in the gun battle. A spokesman for Chongqing police confirmed the account.
Zhou had been on the run since 2004, evading capture despite being the target of one of the largest manhunts ever mounted in China.
By the end, the combined value of all the rewards placed on his head had risen to 5.4 million yuan (£541,000) and wanted posters had been pinned up as far afield as Shanghai, more than 1,000 miles from his home town in Chongqing municipality.
Gun crime is extremely rare in China, where firearms are strictly controlled. But Zhou had killed a total of nine people, including one police man, in a series of armed robberies.
He targeted bank customers withdrawing large sums of cash, following his victims and shooting them in the head before making a swift getaway.
“He remained very calm after the murders and would decide the quickest way to escape,” said Pi Yijun, a criminologist at China University of Political Science and Law in Beijing.
“He would do his homework by staying at a bank and observing its customers, working out the best place to strike. After so many murders, he knew he would get the death penalty, so there was no moral struggle in his mind.
“That is why he would shoot people on the spot, leaving little trace for the police because the crimes were swift and smooth,” he added.
Zhou would lie low for long periods of time, disappearing at one stage for more than four years, between 2005 and 2009.
His long spell on the run led some to question whether all the killings were the work of the same man, but police said that DNA evidence had shown he was guilty of at least three of the murders.
He resurfaced last Friday for the first time since January, killing a woman outside a branch of the Bank of China in Shapingba, a district of Chongqing.
The local authorities quickly mounted an enormous manhunt, calling back all police on leave and mobilising the local army. However, after combing Gele Mountain, only a ragged green T-shirt and two cigarette cartons were found.
CCTV said on Tuesday thought that the manhunt, which was widely publicised in the media, had been a ruse to give Zhou a false sense of security.
In fact, Zhou had been spotted in a department store in Chongqing on August 11, leading police to believe he had remained close to the scene of his last crime, rather than retreating to his mountain hideout.
Quietly, four-man teams of plain-clothed police moved through the city to sniff him out. Eventually a resident in Tongjiaqiao, just nine miles from his mother’s home, reported him to the police Tuesday morning, collecting a 600,000 yuan reward.
Zhou’s father died last August, but his mother lives in a three-floor house and has been under constant police surveillance since January.
His ex-wife, meanwhile, lives in a neighbouring town with their 13-year-old son. Zhou is thought to have paid them a visit at the beginning of the year after committing a murder and stealing 200,000 yuan (£20,000) in Nanjing.
Zhou left home at the age of 18 to work at a site by Jialing river collecting sand for construction companies. Described as an “honest but introverted” youth by his former neighbours, he quickly ran into trouble, being sent down to a labour camp in 1997 for possession of a firearm.
Photographs of his corpse showed him wearing a blue-checked shirt and grey trousers, his hair cropped close at the sides.
In a small black bag, the police found two used train tickets, some cold medicine and around 300 yuan (£30) in cash. Later, a spokesman added that the robber had been carrying “between 10,000 yuan and 20,000 yuan” in cash.
Two Chinese newspapers also disputed the account of his final moments. The Chongqing Times said he had committed suicide and the police had merely found his body. The Changsha Evening News, however, said that he had turned the gun on himself after being shot twice by police.Malcolm Moore