Iraqi Prime Minister Mustafa al-Kadhimi wrote on Twitter that the man was responsible for IS's economy and deputy after Abu Bakr al-Baghdadi, the group's leader who was killed in a US-led raid in Syria in 2019. The man also has close links to the terrorist group al-Qaeda.
The now arrested man has been wanted by the United States, which previously offered a multi-million reward for the person who stated where he was.
The operation is described by the Prime Minister as one of the most difficult that Iraqi forces have done outside the country's borders.
It is not known which country the terrorist leader was arrested in.