The attack happened Aug. 29 in a village around 12 miles outside the town of Madang, the Post Courier reported.
Chief Superintendent Sylvester Kalaut of the Madang Provincial Police said local people attacked Steven Tari, also known as Black Jesus, and another man believed to have been one of Tari's followers.
Initial reports from Tari's home village of Gal indicate that the two men were attacked and killed by locals after he murdered one woman and attempted to take the life of another, Kalaut said.
A report by the Papua's National newspaper said Tari and his follower were attacking a local girl, one of his disciples, when a group of villagers surrounded the two men and hacked them to death.
Tari, 42, was alleged to have killed a grade 7 schoolgirl last month and dumped the body beside the road just outside a village, Kalaut said.
Tari had escaped from Beon jail along with around 50 other prisoners in a mass breakout attempt in March and had been on the run.
He was serving a long jail term after Madang National Court found him guilty in 2010 of four counts of rape.
During his initial trial that started in March 2007 police alleged that Tari had killed and ate three young women he had recruited as sex slaves, the BBC reported at the time.
He failed to appear in court for a while because he had been beaten severely by villagers who had captured him, the BBC said.
During the trial in 2010, Australia's Sydney Morning Herald newspaper reported that the court heard Tari preached that young girls were to be "married" to him as it was God's prophecy.
He eventually was found guilty of rape, but not of any other charges.
A report by the Britain's Independent newspaper last week said Tari's 6,000-strong sect called him "the true Christ" and referred to themselves as "flower girls" or "disciples."
The charismatic cult leader wore white robes and is said to have regularly drunk the blood of his "flower girls," the Independent report said.
A cargo, or wealth, cult is a Melanesian movement typified by bizarre rituals, often involving sex and bodily harm. Followers are promised that they will be rewarded with wealth.