The video, originally uploaded on the IS Russian language media channel Al Furat Media shows Mohd Najib Hussein aka Abu Anas al Muhajir, a bookshop owner turned militant, drawing his last breath from a gunshot wound.
He was reportedly among 13 Abu Sayyaf gunmen killed on December 16 on Basilan island.
In the video, a narrator explains that Najib, a father of five, travelled to the Philippines where he founded a militant group, the first to swear allegiance to the IS.
He was also a key figure in the IS Black Flag cell led by Universiti Malaya professor Dr Mahmud Ahmad alias Abu Handzalah, who has been hiding out with the Abu Sayyaf in the southern Philippines.
Najib, a 37-year old electrical engineering graduate was believed to be running an Improvised Explosive Device, small-medium enterprise factory in the Philippines.
The video, which portrays Najib as a martyr, shows him being carried in a makeshift stretcher by his prayer reciting companions, before he succumbs to his wound.
