Medhanie Yehdego Mered, 35, who had been on a wanted list since 2015 for international people smuggling, was arrested in the Sudanese capital Khartoum and flown to Italy late Monday.
He is "the accused ringleader of one of the four largest criminal migrant trafficking organisations", the Sudanese interior ministry said in a joint statement with the country's British and Italian embassies.
Referred to in wiretapped conversations between his subordinate alleged traffickers as "the general" for his control over a large area and number of "troops", Mered is accused of organising the smuggling of up to 8,000 people a year on migrant boats.
He reportedly described the sinking as "Allah's will" in a wiretap.
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His arrest is "a key turning point in the fight against people trafficking," prosecutor Francesco Lo Voi told a press conference, while Italian Interior Minister Angelino Alfano dubbed it "an extraordinary result" in a bid to stop "merchants of death".
It is the first time a suspected top smuggler has been arrested in Africa and brought to face justice in Italy, which has been overwhelmed by the arrival of hundreds of thousands of people since the migrant crisis began in 2008.
Between 2012 and his capture, he also played a key role in helping migrants escape from Libyan jails and detention centres, bribing guards to let them out and then holding them to extort money from their relatives back home, police said.