Neil Prakash, the Islamic State operative behind a string of failed Australian terror plots, has been killed in a US military air strike in Iraq, it's been reported.

His death was part of a series of targeted assassinations that also killed Australian woman Shadi Jabar, the sister of Parramatta shooter Farhad Jabar, The Australian reported.

US military officials have told the Australian government that Prakash and Jabar were killed in separate air strikes.

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Prakash, the most senior Australian fighting with Islamic State, was killed last Friday along with about a dozen fighters in the northern Iraqi city of Mosul.

The Australian said a government official confirmed Prakash's death on Wednesday night.

The official said Prakash had urged lone-wolf attacks against the US and Australia, had appeared in ISIL propaganda videos and magazines and actively recruited Australian men, women and children.

He was also involved in a string of failed Australian terror plots last year including a plan to run over and behead a policeman in Melbourne on Anzac Day and go on a shooting rampage with his gun.

A week before Prakash's death, Shadi Jabar Khaled Mohammed was killed in a US air strike in al Bab, northern Syria along with her husband, Abu Saad al-Sudani.

She was the sister of Farhad Jabar, the 15-year-old terrorist who shot NSW police worker Curtis Cheng as he left Parramatta police station last year in an ISIL-inspired killing.