Rocco Morabito -- described by authorities as a prominent member of the Ndrangheta, or Calabrian Mafia -- had been wanted since 1994. He was convicted in absentia for drug trafficking and organized-crime activities in Italy, and was sentenced to 30 years in prison.
Italian authorities said that Morabito had been responsible for shipping drugs into Italy and arranging distribution in Milan.
The Uruguayan Interior Ministry said Morabito was arrested Friday in a hotel in the Uruguayan capital of Montevideo. Italian police said the arrest followed "months of international cooperation and intelligence activity."
Italian Interior Minister Marco Minniti lauded Morabito's arrest, saying he was "considered one of the sought-after members of the Ndrangheta."
Uruguayan authorities said some months ago Morabito tried to enroll his daughter in a local school using his real name, and his fingerprints were confirmed by Italian authorities.
Interpol issued a red notice for Morabito -- its highest-priority international arrest warrant -- in 1995 following an arrest warrant issued by Italian prosecutors in Reggio Calabria.
Authorities said Morabito -- one of Italy's five most-wanted fugitives -- entered Uruguay in 2001 using false Brazilian identification papers including a bogus birth certificate. For the last decade he lived in a comfortable rural villa near the town of Maldonado, adjacent to the resort city of Punta del Este.
When he was arrested, Morabito had 13 cell phones, an automatic pistol, 12 credit and debit cards, a large quantity of Uruguayan money and US $50,000 in cash, plus currency certificates worth US $100,000, the Uruguayan Interior Ministry said.
In a search of Morabito's home in the town of Maldonado, authorities seized a 2015 Mercedes and a Portuguese passport in his false Brazilian name. His wife -- an Angolan national with a Portuguese passport -- was also arrested, authorities said.
According to the Uruguayan Interior Ministry, Morabito was indicted for three crimes of forgery and will remain in preventive detention for three months while extradition proceedings are underway Italian police say once extradited, Morabito will face the 30-year sentence handed down two decades ago.