The suspect, Bangladeshi-Canadian Tamim Ahmed Chowdhury, was killed along with two others, the national police chief said Saturday.
The two other extremists killed have not been identified
, national police chief Shahidul Hoque said, adding that another suspected mastermind is under investigation.
The terror attack at a bakery popular with foreigners left 21 people dead, including 18 foreign nationals. In addition, four terrorists were killed in the standoff while one was captured alive.
Chowdhury is one of the leaders of the banned Islamist group Jamaatul Mujahideen Bangladesh, or JMB, the police chief said.
The terror group ISIS claimed responsibility for the attack, even though authorities have consistently denied its presence in the nation and said the attack was carried out by homegrown militants, hinting toward JMB.
Bangladeshi police announced a cash reward this month for information leading to Chowdhury and a second suspected planner of the cafe terror attack.
The attack took place in the city's diplomatic enclave, and those killed were from around the globe:
Italian, Japanese, Indian, Bangladeshi and an American.
Even in a country that has become increasingly numb to Islamist attacks, the Holey Artisan Bakery standoff was particularly jolting in its brazenness.
Holiest day of the week
The gunmen went into the bakery on a Friday, the holiest day of the week in Islam, and at a time when the devout would be sitting down to break their fast in the holy month of Ramadan.
And they targeted not a bar or a club -- the kinds of venues fundamentalist Muslims rail against -- but a bakery in the city's Gulshan district, one of Dhaka's most affluent neighborhoods.
Residents in the neighborhood expressed shock because the upscale neighborhood was considered safe with buildings behind walls, gated driveways and security guard booths.
Two suspects remain in custody
Two men -- Hasnat Karim and Tamid Khan -- are still in custody under suspicion of involvement in the attack after being denied bail this week.
According to their families and friends, the two were hostages, not attackers, and were detained immediately after the shooting and never released.
No charges have been filed against either. In Bangladesh, it is legal for authorities to detain suspects without pressing charges.
The most recent update on the Facebook page campaigning to release Khan, a university student, said this week that he was still in custody. "We continue to wait for the investigation to be completed," it said.
Karim was also denied bail Wednesday.
"This has been an extremely difficult time for our family as he has now been away from us for 54 days," a post to the Facebook page Free Hasnat Karim said. "We continue to feel confident and full of hope that any further investigation will continue to prove his innocence. Hasnat is a loving and devoted father and husband, and we will continue to cooperate with authorities to secure his release."
His family said they were at the cafe celebrating a birthday but were forced by the gunmen to carry out tasks that led some customers to believe he was part of the attack.
"There is no justification at all for his incarceration with no end in sight," Karim's lawyer, Rodney Dixon, said. "He should be released immediately and at least granted bail. The police have his passport, his family lives in Dhaka, and he is clearly going nowhere."
There has been one confirmed case of mistaken identity. The cafe's chef Saiful Islam Chowkidar was shot and killed by police who believed he was a fleeing terrorist.
The victim had been wearing a restaurant uniform but was running away near the attackers when authorities stormed in.