A joint Italian and Indonesian police operation picked up 40-year-old Antonino Messicati Vitale, who is believed to be the chief of the Villabate clan, just outside of Palermo.
Vitale is wanted on multiple charges, including murder, extortion, human trafficking and illegal arms trading.
"The fugitive's residence was in a luxurious residence in a seaside resort in Bali," said Italian police in a statement.
An arrest warrant for Vitale had been issued in April.
Italy’s ANSA news agency reported that a senior Indonesian police official, Maj. Pande Putu Sugiarta, believes Vitale had been hiding out in Bali for the past six months, after having escaped capture during a police raid in Villabate.
According to the Associated Press, Vitale was residing in the Legian neighborhood, just north of Kuta.
BBC reported that Italian authorities tracked Vitale in Bali by bugging telephone calls made by friends and relatives. They subsequently followed a group of family members who journeyed to Bali to see the mobster.
Italian media reported that Vitale was relaxing with a cigarette, reading Dan Brown’s novel “The Lost Symbol,” on the beach when he was apprehended. He did not resist arrest.
However, Indonesia and Italy currently have no extradition treaty, so it is unclear when Vitale will be returned to his homeland to face charges.
"This [matter] will be processed through the ministry of justice and human rights," Yudi Sroja, of Indonesia's national crime bureau, said.
Before facing trial on new charges, Vitale has to serve 10 years in prison on a prior conviction for mafia association.
Vitale's father, Pietro, also a mafia boss, was killed in 1988.