Ostermann was killed in action on 9 August 1942 far behind Soviet lines east of Lake Ilmen. He and his wingman "Unteroffizier" Heinrich Bosnin were flying at an altitude of when they spotted a formation of nine Curtiss P-40's. Ostermann shot down the rear P-40. The two were reforming to make a second attack when they themselves were attacked from behind by a group of Soviet fighters emerging from the broken cloud cover. Ostermann's Bf 109G-2 ("Werknummer" 10438—factory number) was hit in the cockpit by 41 IAP's (41st Fighter Aviation Regiment) "Starshiy Leytenant" (First Lieutenant) Arkadiy Sukov flying a LaGG-3. The aircraft rolled over and crashed into the edge of a small wood. After Werner Mölders and Leopold Steinbatz, Ostermann was the third of 45 recipients of the Knight's Cross of the Iron Cross with Oak Leaves and Swords to die in World War II. This made him the first Swords recipient to be lost in air combat, as Mölders death was accidental and Steinbatz had only received the Oak Leaves before he died.