The encounter between Maoists and the elite anti-Maoist force Greyhounds took place in the Chalapaka forest area in Eturnagaram mandal of the district around 5.30 a.m., police said.
Some key leaders of the Communist Party of India (Maoist) were believed to be among those killed.
The exchange of fire began when Greyhounds personnel conducting combing operations in the forests spotted a group of Maoists and ordered them to surrender. However, the Maoists opened fire on the Greyhounds commandos, forcing them to return the fire.
There were no immediate reports of any casualties on the police side.
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