Tse Chi Lop – a Chinese-born Canadian national – is said to be the head of The Company, which dominates a $70bn illegal drugs market across Asia.
Listed as one of the world’s most wanted fugitives, Mr Tse was detained at Amsterdam’s Schiphol airport.
Australia will now seek his extradition to face trial there.
The Australian Federal Police (AFP) believe The Company, also known as the Sam Gor Syndicate, is responsible for up to 70% of all illegal drugs entering the country.
The 56-year-old has been compared to the Mexican drug lord Joaquin “El Chapo” Guzman because of the scale of his alleged enterprise.