Spanish police say they have arrested one of the US FBI's '10 most-wanted' fugitives, who was staying at a hotel in Madrid under a false identity.

Michael James Pratt, a New Zealand citizen, had been sentenced to life in prison for child pornography, sexual exploitation and sexual assault in the United States.

Police said he was involved in the audiovisual production of pornography, recruiting underage girls and young women through deception between 2012 and 2019.

Pratt earned more than $US17 million ($25 million) from those activities.

The FBI confirmed that Spanish authorities had made the arrest earlier this week and thanked the Spanish National Police and the public for their assistance in the investigation.

"The capture of Michael Pratt is an example of how the FBI will pursue justice beyond US borders — you can run, but you can't hide," said Special Agent in Charge (SAC) Stacey Moy of the FBI San Diego Field Office.

The FBI had been offering $100,000 for information that led directly to his arrest, but did not say if a tip from the public had contributed to Pratt's apprehension.

Pratt has been a fugitive since 2019 and was placed under an Interpol Red Notice, a request to law enforcement worldwide to locate and provisionally arrest a person overseas.

Only 57 criminals on the FBI's 'most wanted' list have ever been apprehended outside the bureau's jurisdiction, Spanish authorities said, adding that it was the first time this had occurred in Spain.

Pratt is being held in Spain pending extradition.

Police said the fugitive placed online advertisements offering "modelling" jobs, which turned out to be pornographic recordings.

He paid other women to act as "bait" to convince the victims the recorded material would not be published online.

Police said that, sometimes, victims were held against their will and forced to perform sexual practices to which they had previously expressly refused consent.

ABC/Reuters