The National Police said in a tweet that a 7-year-old Belgian Malinois named Diesel, a SWAT team assault dog, was "killed by terrorists" during the raid in Saint-Denis.
Diesel's death was confirmed at 11:40 a.m. Paris time, about seven hours after the raid began.
The siege ended with two deaths and seven arrests but no clear information on the fugitive's fate.
The dead were a woman who blew herself up with an explosive vest and a man hit by projectiles and grenades, authorities said.
MORE: 2 dead, 7 arrested in raid targeting Paris attack mastermind
The Associated Press contributed to this report.