The deceased was identified as Naim, 22.
District Detective ranch of police OC Ashikur Rahman said they arrested Naim on Tuesday in connection with the killing of Ibrahim, who earlier killed in muggers' attack.
According to his statement, a team of police alongwith Naim conducted a drive in the area on Wednesday night to caught his accomplices.
Sensing their presence, the gang members opened fire on the team forcing the law enforcers to fire back that triggered a gunfight.
Naim was caught in the line of fire and died on the spot, police said.
But his accomplices managed to flee the scene.