The U.S. military said on Wednesday he was killed in an operation carried out by the rebel Free Syrian Army (FSA) in northwestern Deraa province.
The province was brought under the control of the Syrian army following Russian- brokered reconciliation agreements in 2018 that gave control of southern Syria back to Damascus.
Quraishi and his aides had been discovered in a secret hideout in a house, said the sources, who included Syrian Free Army fighters, and relatives of comrades who died in clash, as well as residents of Jasem.
"The leader and a companion blew themselves up with suicide belts after our fighters succeeded in storming their hideout," said Salem al Horani a resident of Jasem and former fighter who participated in the siege of the three houses where the IS cell was discovered.
The FSA had received backing from the West and Gulf states until they withdrew support in 2018, but its fighters remained in the area after the reconciliation deals under which they handed over heavy weapons but were allowed to keep light arms.
Islamic State has selected Abu al-Hussein al-Husseini al-Quraishi as its new leader, said a spokesman for the group. He said Quraishi was killed while "fighting enemies of God", without elaborating.
Islamic State emerged from the chaos of the civil war in neighbouring Iraq and took over vast swathes of Iraq and Syria in 2014. Former IS caliph Abu Bakr al-Baghdadi declared an Islamic caliphate from a mosque in the northern Iraqi city of Mosul that year and proclaimed himself caliph of all Muslims.
Islamic State's brutal rule, during which it killed and executed thousands of people in the name of its narrow interpretation of Islam, came to an end in Mosul when Iraqi and international forces defeated the group there in 2017.
(Reporting by Suleiman Al-Khalidi; Editing by Simon Cameron-Moore)
By Suleiman Al-Khalidi