The official told the AFP news agency on condition of anonymity that Umar Patek had been detained on Tuesday but declined to give details about where or how the arrest was made.
There has been no immediate confirmation from authorities in Pakistan.
A team comprising police and counter-terrorism officials has been sent to Pakistan, Indonesian officials said.
“Our intelligence team is verifying the information with the Pakistani authorities to confirm if the person arrested was really him,” National Anti-Terror Agency chief Ansyaad Mbai told AFP.
“If it’s him, then that’s really good news for us.”
“We’re not surprised if he’s in Pakistan as these terrorists move from country to country,” he added.
Indonesia’s counter-terrorism police have been tracking Patek for years. One of the most wanted Islamic extremists in Southeast Asia, he has a US$1 million bounty on his head under the US government’s “Rewards for Justice” programme.
Born in 1970, he was the alleged field coordinator for the bombings of night clubs on the Indonesian resort island of Bali, which killed 202 people including 88 Australians.
Patek is a suspected member of Al-Qaeda-linked Southeast Asian terror network Jemaah Islamiyah (JI), blamed for a series of deadly bombings targeting Christians and Westerners in Indonesia dating back to 1999.
Indonesian authorities had believed he was hiding among Islamic rebels in the southern Philippines. The International Crisis Group, a think tank, reported in 2008 that he had become the commander of foreign jihadists there.
Police were investigating reports that Patek had returned to Indonesia early last year to join a new militant group being set up in Aceh province by another alleged Bali ringleader, Dulmatin.
Dulmatin was killed during a police raid in March, 2010.
“Umar Patek is a dangerous person. He’s a bomb-making expert who teaches others how to assemble explosives. He’s an operational leader of Jemaah Islamiyah,” University of Indonesia security analyst Kusnanto Anggoro told AFP.
“And he uses his expertise and influence to cause harm to people and to incite hatred. It’s a significant arrest,” he added.
JI’s goal is to unite Indonesia, Brunei, Malaysia, Singapore and the southern Philippines in an Islamic state governed by a strict interpretation of sharia law similar to Taliban-ruled Afghanistan.
The group has carried out more than 50 bombings in Indonesia that have claimed hundreds of lives, mainly Muslims, since April, 1999.
The last significant bombing in Indonesia — the world’s most populous Muslim-majority country — killed seven people and two suicide bombers in two luxurious hotels in Jakarta in July, 2009.
It was believed to be the work of Malaysian terror mastermind Noordin Mohammad Top, who led a JI splinter group. Top was killed in September, 2009.