Acting on information that the wanted terrorist was in a house outside the village of Gurbuki, special forces stormed the building, killing Daudov's son and three other militants in the resulting firefight.
Daudov was heavily injured in the assault but managed to escape after fatally wounding a member of the security forces.
The terrorist's camouflage-clad body was found 2 kilometers from Gurbuki on the bank of the river Gubdenozen. Daudov had been wounded several times and was wearing a tourniquet on his hand. He likely died of shock from his injuries and cold temperatures that reached as low as minus 15 C, Kommersant reported.
The special forces also found archival material in the building that had housed the insurgents, including a video message from the leader calling for the killing of innocent people.
"Daudov, addressing the villagers, did not hide his murderous intentions when he said he will not spare anyone, 'whether you are my sister or her child,'" the National Antiterrorist Commission said, describing the video message.
Daudov, also known as "Amir Salekh," had been on a federal wanted list since 2010 for planning terrorist attacks in Moscow and other regions of the country. He took over leadership of the criminal group in August 2011 after previous leader Validzhanov Daudov was killed.
Last year almost 50 terrorist leaders were killed and more than 600 were detained, Interfax reported, citing Alexander Bortnikov, head of the Federal Security Service, or FSB. Terrorist crimes fell by half in 2011 compared to the previous year, Bortnikov said.
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