Indonesian police say they watched a suspected Australian citizen and people smuggler for two weeks before they took him in on Tuesday night, AAP reports.
The man has been identified as Ali Hamid and has also been linked to last month's Christmas Island tragedy when an asylum seeker boat broke apart in heavy seas with the loss of at least 30 lives.
The head of Indonesia's anti-people smuggling task force Agung Sabar Santoso says officials believe Ali Hamid has been working with a number of accomplices, and police seized eight mobile phones when they arrested him.
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Canberra has confirmed the arres, saying a 40-year-old Iranian man believed to have Australian citizenship has been detained by Indonesian authorities.
"He's a big fish, a cunning smuggler," Santoso told AFP.
"From the information shared by the Australian police, we gathered that he had sent boatloads of illegal Afghan and Iranian immigrants to Australia such as Christmas Island and Ashmore."
Hamid was arrested at an apartment in Central Jakarta on Tuesday evening and found with about six mobile phones and several credit cards.
