Omar al-Shishani, a top commander of the Islamic State of Iraq and the Levant (ISIL), has been killed in Iraq, a website affiliated with the armed group said.

Citing a "military source", ISIL's website on Wednesday said that Shishani was killed "in the town of Sharqat as he took part in repelling the military campaign on the city of Mosul".

Amaq, the ISIL-linked website, did not specify when Shishani was killed, but the loss of the commander is a significant blow to the group, which has suffered a string of setbacks in Iraq this year.

Mosul is the last ISIL-held city in Iraq. Al Jazeera could not independently verify the report.

The Pentagon announced in March that US forces had killed Shishani, saying his death would probably hamper ISIL's operations in Iraq, Syria and elsewhere.

READ MORE: Abu Omar al-Shishani: Death of an ISIL commander

Al Jazeera's Tom Ackerman, reporting from Washington, DC, said his death "is not necessarily a big development, as far as the US is concerned".

"The question here is why is ISIL so willing to admit that he in fact is dead," Ackerman said.

"We'll have to see exactly what comes out of the Pentagon and also what comes out of the Iraqi command as to what the actual effect of this will be on the fight for Mosul."

But US officials - who had previously, prematurely announced Shishani's "likely" death from an air strike - did not specify how or where he was killed.

Detriment to ISIL

Joshua Landis, director of the Centre for Middle East Studies at the University of Oklahoma, said Shishani made a name for himself during the capture of Menagh Airbase from Syrian government forces in 2013.

US-backed rebels teamed up with Shishani’s militia, which was mostly foreign fighters, and used suicide bombers to finally capture the airbase after a two-year-long siege in northern Syria.

“He then joined ISIS and rose to the top. He was a big personality. Troops liked him,” Landis told Al Jazeera.

“It’s been reported a number of times that he’s been killed, most recently in March. The United Stated claimed that it had killed him in a bombing raid. Then they denied it. Some people said that he was brain dead in a hospital. So we don’t know yet. There is a lot of fog around this - whether this is related to the bombing in March or this is something new,” he said.

“Anyway, it will be a real detriment to ISIS.”

'Omar the Chechen'

Shishani, whose real name was Tarkhan Batirashvili, was a fierce, battle-hardened fighter with roots in Georgia.

Shishani, whose nom de guerre means "Omar the Chechen", was one of the ISIL leaders most wanted by Washington, which had put a multi-million-dollar bounty on his head.

His exact rank was unclear, but US officials had branded him as "equivalent of the secretary of defence" for ISIL, also known as ISIS.

Shishani came from the former Soviet state of Georgia's Pankisi Gorge region, which is populated mainly by ethnic Chechens.

READ MORE: Why Georgians in a remote valley are joining ISIL

He fought as a Chechen rebel against Russian forces before joining the Georgian military in 2006, and battled Russians again in Georgia in 2008.

He later resurfaced in northern Syria as the commander of a group of foreign fighters, and became a senior leader within ISIL.

The hardline group overran large areas north and west of Baghdad in 2014, but has since lost ground to Iraqi forces backed by US-led air strikes and other assistance.

The group has responded to the battlefield setbacks by striking civilians, particularly Shia Muslims, and experts have warned that there may be more bombings as the group continues to lose ground.