Potter was arrested on Monday morning, 12 years after he allegedly failed to appear in the Melbourne Magistrates' Court on conspiracy to murder and drug offences.

Video from Queensland detectives showed a barefoot Potter, dressed in only shorts and a T-shirt, being handcuffed at a property in Queensland's Tablelands region.

The former fugitive is due to appear before the Mareeba Magistrates' Court on Tuesday.

Victorian detectives are travelling to Queensland to help with his extradition.

Victorian Acting Assistant Commissioner Mick Frewen said Potter's arrest was an outstanding result for the nation's police.

"It certainly puts to an end a long and protracted hunt for a very high-end fugitive that it's wanted for very, very serious criminal charges," Mr Frewen said.

"While the trail had gone cold, the resolve to locate Graham right across Australia has not wavered."

Potter was allegedly hired in 2008 to kill a man at the wedding of the son of Melbourne underworld figure Mick Gatto.

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He also faces charges over a $440 million ecstasy and cocaine haul the same year.

Potter served 15 years in jail for the 1981 mutilation and murder of Wollongong teenager Kim Barry.

He was known to use disguises, such as wigs and fat suits, and there were several unconfirmed sightings over the years.

Potter was previously spotted by police at Tully, in North Queensland, in August 2010 but escaped.

Australian Associated Press