Government troops and supporting militia forces got word of an attack planned by Al-Shabaab in Ceeldheer, in the Galgadud region, set an ambush and "destroyed" them, said a statement.
Their forces killed at least 47 members of the militant group while losing five soldiers in the battle, said the authorities. They said airstrikes were also carried out against the Al-Shabaab forces.
Al-Shabaab claimed responsibility for the attack on Ceeldheer.
Local resident Mohamed Hussein told AFP by telephone: "There was heavy fighting in Ceeldheer town this morning after Al-Shabaab attacked the town from several directions.
"It was very hard to say who is in control a while ago but now we can see that the Somali government forces are in full control," he added.
Another local man, Hassan Gutale, said: "There were at least six heavy explosions and fighting that lasted several hours."
Elected in May, 2022, Somali President Hassan Sheikh Mohamud vowed to wage "total war" against the Islamist group.
Al-Shabaab has been waging a deadly insurgency against the fragile central government in Mogadishu for more than 16 years.
Although driven out of the capital by an African Union force in 2011, they still have a strong presence in rural Somalia.
They have carried out repeated attacks against political, security and civilian targets, mostly in Somalia but also in neighbouring countries including Kenya.
Somalia's beleaguered federal government has joined forces with local clan militia against the Islamists, retaking swathes of territory in central Somalia in an operation backed by an AU mission known as ATMIS and US air strikes.
But the offensive has suffered setbacks, with Al-Shabaab earlier this year claiming it had taken multiple locations in the centre of the country.
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