Kidnapped police captain Ayman El-Desouki was found dead on Tuesday in the restive Sinai Peninsula, Egypt's army announced in a statement.
A military spokesperson described the killing as "cowardly."
"We extend our deep condolences to the family of the late policeman, and we stress that such incidents increase our determination to fight all kinds of terrorism in Egypt," the statement read.
El-Desouki, an officer in the ports security division, was on a bus in North Sinai on Monday when alleged members of militant group Ansar Beit Al-Maqdis(ABM) – who had set up a checkpoint – searched the bus and took him to an unknown location.
The army statement added that on Tuesday morning police and military personnel pursued 'terrorists' in Sheikh Zuweid, Rafah and Al-Arish, the places where the police captain might have been captured.
It also said that during the pursuit ten 'terrorists' were killed, while two others were arrested.
Egypt's general prosecutor, Hisham Barakat, imposed on Monday a gag order on the incident because the matter was still being investigated.
ABM, which has claimed responsibility for a number of terrorist attacks, including the killing of 30 army personnel in October, pledged allegiance to Islamic State last November.
Egypt’s security forces have been facing a decade-long jihadist insurgency based in the Sinai Peninsula, with militant attacks increasing over the past 18 months and expanding into Cairo and the Nile Delta, killing hundreds of army and police personnel.