Rebel forces said they shot Khamis Gadhafi dead in a car while he was travelling in a convoy near Zlitan, where the dreaded Khamis Brigade was headquartered.
According to a rebel military leader, Khamis was shot on Saturday by rebel troops in clashes that took place 80 kilometers southeast of Tripoli.
It's not the first time Gadhafi's youngest son has been reported killed, and the news of Khamis' death could not be independently verified.
Khamis had been trained in Russia and commanded Libya's 32nd Brigade, a unit of guards fiercely loyal to Gadhafi, and known for its human rights violations.
Meanwhile, it was reported that Gadhafi's wife Safia, his daughter Aisha and his sons Hannibal and Mohammed, crossed over to Algeria, along with other members of the extended family.
According to the Algerian Foreign Ministry, they entered Algeria on Monday at 8:45 a.m. local time (0745 GMT) across the border.
According to Mahdi al-Harati, the vice chairman of the rebels' Military Council, rebel forces battled Khamis near Bani Walid in northwest Libya. Khamis sustained injuries and was taken to a hospital, where he died later, CNN reported, quoting al-Harati.
Khamis was then buried in the area by rebel forces, al-Harati said.
It was reported earlier that the Khamis Brigade had killed around 50 detainees and then set the Tripoli warehouse where they were lodged on fire on Aug. 23. A similar incident was reported on Aug. 21, when the Khamis Brigade killed 17 detainees in a makeshift prison near Gargur in Tripoli. In another incident, on Aug. 26, 18 decomposed corpses were also found near the Internal Security building in a dried riverbed between Gargur and Bab al-Aziziya, opposite the Brigade headquarters. These acts of vengeance by the Gadhafi regime are widely seen as serious war crimes that violate the International humanitarian laws applicable in armed conflict.
Meanwhile, the whereabouts of Moammar Gadhafi, who is wanted by the International Criminal Court in The Hague on charges of war crimes, remain unknown. The United States said there was no indication that he has managed to leave the country. The UK government said the fate of Gadhafi's relatives was a matter for the NTC.
There has been intense speculation that Gadhafi might try to reach Algeria, as it was one of the few countries that supported him in recent times.
We want to see justice and accountability for Gadhafi and those members of his family with blood on their hands and those members of his regime with blood on their hands ... But it'll be a decision of the Libyan people, (as to) how that goes forward, U.S. State Department spokeswoman Victoria Nuland said.