Mexico's government says it has confirmed that a man killed in an early morning shoot-out with marines in the west of the country was the leader of the Knights Templar Cartel, who officials reported slain in 2010.

Federal prosecutor Tomas Zeron said the identity of Nazario Moreno Gonzalez had been confirmed by fingerprints, but added that further tests will take place, the AP news agency reported.

Zeron said the government is 100 percent sure that Moreno, also known as "El Chayo" or "The Craziest One," was killed this time.

Authorities were awaiting DNA tests for final confirmation that they had the body of Moreno, said an official in the federal government and one with the Attorney General's office.

Moreno's death would be one of the more bizarre twists in Mexico's assault on drug cartels, in which two other senior members of the country's most powerful cartels have been captured in the last year without a shot fired.

One of the officials said Sunday's shoot-out happened near the farming hub of Apaztingan in the heart of western Michoacan state, where the Knights Templar have ruled through stealing, killing and extortion.

Moreno would have turned 44 on Saturday, according to a government birthdate.

He led the La Familia Michoacana cartel when he supposedly perished in a two-day gun battle with federal police in December 2010 in Michoacan, his home state. No corpse was found then, however.

The government of the President Felipe Calderon officially declared him dead, saying it had proof, but some residents of Michoacan had reported seeing Moreno since then.

Since the earlier death report, his former cartel morphed into the more vicious and powerful Knights Templar.

'Folk hero'

The cartel under both names preached Moreno's quasi-religious doctrine and moral code even as it became a major trafficker of methamphetamine to the US.

When federal attorney general Jesus Murillo Karam was recently asked about the rumour that Moreno was still alive, he said: "We can't confirm or deny it officially as long as we have no concrete evidence, and I can tell you that we have nothing."

After the 2010 death report, Moreno reportedly helped build himself up as folk hero, erecting shrines to himself and to the Knights Templar, which adopted the Maltese cross as a symbol.

The hunt for him was accelerated last year as vigilantes, tired of the cartel's control of the state and government inaction, took up arms against the Knights Templar, saying they wanted to get the cartel kingpins.

All of the civilian "self-defence" group leaders said Moreno was alive.

His reported killing comes on the heels of the February 22 capture of Mexico's most powerful drug lord, Joaquin "El Chapo" Guzman, who surrendered peacefully after 13 years on the run when marines raided his condominium in the Pacific resort city of Mazatlan. Another other top drug lord, Zetas chief Miguel Angel Trevino, was captured last summer, also by the Mexican navy's elite troops.

Though Guzman's capture leaked to the press, Mexican authorities waited several hours before announcing it so they could solidly confirm they held the leader of the Sinaloa cartel, the country's largest.

They later gave a detailed explanation of how they fingerprinted him and measured his facial features against photographs, as well as analysed genetic markers from DNA.