Mayor Samsudin Dimaukom of Datu Saudi-Ampatuan, a Muslim autonomous area of Mindanao, was shot along with a number of his bodyguards while allegedly transporting illegal drugs.
The report states that police had set up a highway roadblock aimed at apprehending the mayor based on a tip.
The mayor was on Duterte's list of local officials branded as "narco-politicians" who allegedly have ties to the illegal drug world, according to
CNN affiliate CNN Philippines.
He, along with his wife, surrendered themselves to provincial police in August to clear their names and deny involvement.
At the roadblock early Friday morning, an "armed encounter" between Dimaukom's men and police ensued, the report says, with law enforcement officials responding to fire from the mayor's bodyguards, leaving 10 men dead.
Duterte was elected to office in May on a platform of a hardline crackdown on crime, particularly illegal drugs.
Since taking office in early June, his police force has waged a bloody war on drug dealers and users, resulting in the deaths of hundreds of Filipino drug suspects at the hands of police. Hundreds more have been killed by vigilantes.
Many thousands of others have been coerced into registering with their local authorities as drug users in so-called "knock and plead
Police Chief Ronald Dela Rosa told CNN that all deaths at the hands of police in the country are the result of justified shootings in self-defense. Critics say police are acting with impunity.
There's been no evidence presented that Dimaukom was involved in the drug trade.
Dimaukom is not the first elected official implicated in the drug war. Rolando Espinosa, the mayor of Albuera, on the island province of Leyte, was arrested in August.
His son, Kerwin Espinosa, 35, is accused by Duterte of being one of the biggest illegal drug operators in the Eastern Visayas region and was arrested earlier in October
in Abu Dhabi. He had been on a "shoot on sight" list.
Also earlier this month, the Philippines Senate Committee -- led by a Duterte ally -- decided to stop investigating
the extrajudicial killings of drug dealers and users during the President's first few months in office. The senator heading the committee when the investigation began, a fierce critic of Duterte, was ousted by the President's allies in September.