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 is responsible for up to 70% of all illegal drugs entering the country.
The AFP has been tracking Tse Chi Lop, 56, for more than a decade before his arrest on Friday.
