"The objective [of the operation] was a compound and a group of people in that compound who were associated with attacks against U.S., Somalia and Amisom forces", said Pentagon spokesman Capt. Jeff Davis, referring to African Union Mission in Somalia (AMISOM) peacekeepers.
Milliken was working in support of a Somali National Army-led operation with U.S. Africa Command against al-Shabaab.
U.S. Ambassador to Somalia Stephen Michael Schwartz who extended heartfelt condolences to the family, friends, and colleagues of the victim cited the strong relationship Washington has with Mogadishu.
President Donald Trump approved the use of aggressive airstrikes and military operations to fight the group last month.
"Senior Chief Kyle Milliken embodied the warrior spirit and toughness infused in our very best Navy SEALs", said Naval Special Warfare Commander Rear Admiral Timothy Szymanski. Two U.S. service members were also wounded along with a Somali translator.
US and Somali forces were attacked shortly after arriving by helicopter to the target location, a compound that housed a group of al-Shabaab militants associated with an attack on facilities nearby used by Somali and USA military forces.
The statement said the mission was undertaken in the famine- and drought-stricken country on the Horn of Africa to diminish the threat al-Shabab "presents to Americans and American interests".
1993's calamitous Black Hawk Down incident saw 18 U.S. soldiers killed and 73 wounded, leading to a quick military withdrawal from Somalia.
Somalia's new Somali-American president, Mohamed Abdullahi Mohamed, last month declared a new offensive against al-Shabab, which is based in Somalia but has claimed responsibility for major attacks elsewhere in East Africa.
"Although US forces are not engaged in direct action (in Somalia), advise and assist missions are inherently unsafe", said Robyn Mack, a spokeswoman at the US military's Africa Command.
The government said the death of the al Shabaab leader 'strengthens the war on terror so fighters have a chance to leave the terror group.
The U.S. has been supporting Somalia's military with about 50 U.S. advisers in a mission that began several years ago.