Colonel Muammar Gaddafi has been killed and his body is being taken to the city of Misratah, Libya's interim prime minister Mahmoud Jibril has confirmed.
"We have been waiting for this moment for a long time," Jibril told a news conference in the capital Tripoli.
Footage has been released of NTC fighters surrounding an injured Gaddafi after his capture.
It follows video that purportedly shows anti-Gaddafi fighters surrounding the body of the ousted Libyan leader before it is loaded onto the back of a vehicle.
There have been conflicting reports about how the capture and killing happened.
National Transitional Council spokesman Abdullah Berrassali told Sky News: "He was shot in both legs and in the head.
"It looks like Gaddafi and his close aides tried to flee.
"The freedom fighters tried to apprehend them but it looks like from the reports, which are not 100% confirmed, that as a result of the exchange of fire maybe Gaddafi was badly injured.
"I have always said that the priority would be to take Gaddafi alive and put him on a fair, just trial ... but if he resisted arrest there was a great likelihood he would be killed."
Earlier National Transitional Council (NTC) military commander Abdel Majid said Gaddafi was injured in a gunfight as his convoy attempted to flee Sirte.
An anti-Gaddafi fighter who claimed he witnessed Gaddafi's capture said the former Libyan leader was shot in the stomach as he hid with his bodyguards.
"We catch him and we shot him, somebody shot him by gun - 9mm," the witness said. Pointing to another man next to him, he added: "This man hit Muammar Gaddafi with his shoes."
Libyan TV channels showed footage of two large drainage tunnels where other reports suggested he had been killed.
Spray painted above the pipe openings were the words "contemptible Gaddafi" and "God is greatest". There was a corpse, apparently a pro-Gaddafi fighter, lying on the ground nearby.
Anti-Gaddafi fighters celebrated on the streets as reports of Gaddafi's fate emerged.
"We did it! We did it!" fighters in Sirte chanted, exchanging hugs and handshakes.
Sky reporter Kitty Logan in the Libyan capital said: "The mood here in Tripoli is of absolute euphoria.
"This is the moment they have been waiting for, this is what their revolution was about and if the rumours are true this is closure for the Libyan people."
Arabic news channels reported Colonel Gaddafi's son Mutassim had also been captured alive in Sirte on Thursday.
Prime minister David Cameron, however, welcomed the news in a short statement outside Downing Street.
"I think today is a day to remember all of Colonel Gaddafi's victims," he said.
The Secretary General of the United Nations, Ban Ki-Moon said Gaddafi's death marked an "historic transition for Libya".
The father of one of the victims Lockerbie bombing, Dr Jim Swire, said the former dictator's death means an "opportunity has been lost" to find out the truth about the attack.