The 52-year-old identified as Francesco di Marte is understood to have been on the run from judicial authorities in the Calabria region, and has been hiding out in the Algarve since last year.
Di Marte, newspaper Correio da Manhã reported, is allegedly the head of a drug trafficking set-up that moves large quantities of drugs between South America and Europe.
He is also believed to belong to the ‘Ndràngheta organised crime group in Calabria, one of Italy’s poorest regions, it is said to be one of the most powerful and violent mafia organisations, independent of the Sicilian and Neapolitan branches.
At the time of his arrest, which took place while the allegedly violent gangster was shopping at a Continente supermarket in Portimão, the suspect identified himself with fake documentation.
He has reportedly been living in a Portimão neighbourhood with his Brazilian wife.
He was taken to Évora court and will be held in custody pending extradition.