Police say the dead were believed to be members of Jamaat-ul-Mujahideen Bangladesh, a Daesh-linked group blamed for the Dhaka cafe attack in which 22 people were killed.
Bangladeshi security forces have killed 11 members of a terrorist group on Saturday, most of them dying during a three-hour gun battle on the outskirts of the capital.
Authorities said the dead were believed be members of Jamaat-ul-Mujahideen Bangladesh (JMB), blamed for a terror attack on a cafe in Dhaka in July in which 22 people were killed, mostly foreigners.
The terrorists were killed in three separate raids on hideouts on the outskirts of Dhaka, Home Minister Asaduzzaman Khan told reporters.
"We requested them to surrender but they opened fire at our officers instead and also exploded grenades, which prompted them to retaliate."
Explosives, weapons and machetes were recovered from all three hideouts and three police officers were injured, police said.
The July 1 attack in Dhaka's diplomatic quarter was claimed by terrorist group Daesh, and was one of the most brazen in Bangladesh, which has been hit by a spate of killings of liberals and members of religious minorities in the past year.
Police have killed more than three dozen suspected terrorists in shootouts since the Dhaka cafe attack, including its presumed mastermind, Bangladesh-born Canadian citizen, Tamim Ahmed Chowdhury.
Chowdhury is reported to have been the subject of a profile in a Daesh journal called Dabiq, which identified him as its top operative in Bangladesh.
The Syria-based terrorist group also published "selfie" photos of the cafe attackers on its propaganda channels while the hostage crisis was continuing.
The government has consistently denied the presence in the country of any transnational terrorist organisation such as al Qaeda or Daesh.
But police believe that JMB, which has pledged allegiance to Daesh, was involved in organising the cafe attack.
In the past year, al Qaeda and Daesh have made competing claims over the killings of liberals and religious minorities in the mostly Muslim nation of 160 million.