One of Italy's most wanted mob bosses has been arrested in Uruguay after more than 20 years on the run.

Dubbed the "Cocaine King of Milan", Rocco Morabito had been wanted since 1994 after playing a major role in the drug trafficking trade between South America and Italy.

The 50-year-old – a member of the notorious Calabria-based 'Ndrangheta organised crime gang – is thought to have been living in Uruguay after first arriving in 2002.

He was arrested in a downtown hotel in the country's capital of Montevideo, authorities said Monday (4 September).

Named as one of Italy's five most wanted organised criminals, he had been living under an alias and using a false Brazilian passport in a luxury villa in the coastal resort of Punta del Este.

His capture comes after a joint operation by Uruguayan and Italian authorities, with officers said to have discovered his whereabouts when he enrolled his daughter in a local school under his own name.

Authorities in Uruguay say the six-month operation also saw Morabito's wife detained.

A number of items were seized by investigators from their villa, including a Glock 9mm pistol, 13 mobile phones, 12 bank cards, two cars, a Portuguese passport, jewels and chequebooks.

Nearly $50,000 in cash and bearer shares worth $100,000 were also taken.

Pending an extradition request from Italy, Morabito has been imprisoned in Uruguay for holding false papers and identity theft.

He then faces a 30-year prison sentence on return to his home country after being convicted in his absence on drug trafficking charges and for being a member of a criminal organisation.

The arrest represents a major breakthrough for Italian prosecutors.

The 'Ndrangheta is among the world's richest and most powerful organised crime groups, according to a 2013 Interpol report.

With a speciality in cocaine trafficking, prosecutors say the crime gang positions its top bosses in South America so they can be close to the drug's producers and ensure deals are secured.

According to his lawyer, Morabito has been leading "a normal life" since 1994 and has not engaged in any criminal activities.

Federico Cafiero de Raho, chief prosecutor for the Calabria region, said Morabito had played "a major role" in the cocaine trade between South America and Milan.