Al-Shabaab suspect was killed during a shootout with anti-terrorism police in Malindi on Wednesday morning.
Three others were arrested when police raided two houses believed to be the locations for recruitment and plotting terror attacks.
Killed suspect Rashid Sultan reportedly had a gun and had blocked police from accessing one of the houses.
Police found jihadi literature, 18 photocopies of IDs and 15 passports size photos of youths believed to have joined terror group al Shabaab.
They also found a pistol, 15 bullets, six mobile phones and a laptop.
Abdullaziz Ali from Majengo area was among those arrested. He is facing attempted murder and terror-related charges.
An officer who was shot in the left hand and chest was taken to Aga Khan Hospital in Mombasa.
Regional police boss Francis Wanjohi said security has been heightened in the coastal region to prevent attacks by al Shabaab militants.