Indonesian forces and intelligence officials are on high alert for revenge attacks after the country's most-wanted militant, Santoso, was killed this week, authorities said.

The police confirmed that Santoso, one of the first Indonesians to be have declared loyalty to Islamic State, was killed on Monday in a shootout with the security forces on Sulawesi island.

Rudy Sufahriadi, the police chief for central Sulawesi, said the threat level in the world's largest Muslim-majority nation is high and the security operation in Poso would continue.

"There is a possibility of a backlash. They are not terrorists if they do not take revenge," he told Reuters.

Chief Security Minister Luhut Pandjaitan said the regions in Jakarta which are considered to be the hotbeds for radicalism will be under strict watch.

Reports say at least 20 members of Santoso's Mujahidin Indonesia Timur are still hiding in the jungles of Sulawesi.

The officials also said that a team of police and military forces shot a man, believed to be Santoso's right-hand man, on Monday.

Last year, President Joko Widodo ordered the military to support the police force along with fighter jets and warships to capture US-designated "terrorist" Santoso, who was hiding in the jungles of Sulawesi.