Local residents said on Sunday that a group of Boko Haram gunmen arrived in Akwada village late Saturday and torched homes after looting food supplies.
"Boko Haram gunmen attacked the village around 7:30 p.m. They fired indiscriminately and hurled explosives," AFP quoted resident Bitrus John as saying, adding, "They killed two soldiers and injured another one in gunfight."
Bulus Samson, another witness, said, "The village has been entirely burnt, there is nothing left apart from burnt rubble of our mud houses."
Akwada adjoins the northeastern Nigerian town of Chibok, where the terrorist group kidnapped more than 200 schoolgirls two years ago.
Nigerian soldiers had deployed in the area following incessant attacks in the area in recent months.
The latest attack underscores the continued threat of Boko Haram in Nigeria's volatile northeast. It came two weeks after similar raids on two nearby villages, where the militants looted and burnt homes.
In a separate development, the Nigerian army said on Sunday it had retaken some villages from the militant group in the Lake Chad region in operations on Friday and Saturday and "rescued" 85 people.
Army spokesman Sani Usman said in a statement that 37 Boko Haram terrorists were killed in another operation in four villages in the south of Borno state.
More than 20,000 people have been killed and some 2.6 million people have been displaced since Boko Haram began its terror activities in 2009. Many blame corrupt officials in the Nigerian government and army for the continued militancy. Recent reports say the terrorist group is receiving some of its arms and ammunition from corrupt Nigerian officials.
The group has pledged allegiance to the ISIS Takfiri terrorists operating mainly in Syria and Iraq.