An Italian fugitive has been detained in Bolivia and will be sent to Italy as "a little gift" from Brazilian President Jair Bolsonaro to Italy's Interior Minister Matteo Salvini.

Cesare Battisti, a 64-year-old former communist militant, was wanted for four murders in the 1970s.

He spent years living in Brazil as a political refugee, but has been on the run since December, when the country's former President Michel Temer revoked his residence and approved his extradition to Italy.

Bolsonaro welcomed the arrest, writing on Twitter: "Congratulations to those responsible for capturing the terrorist Cesare Battisti!"

"Finally justice will be made to the Italian assassin and companion of ideals of one of the most corrupt governments that have ever existed in the world (PT)," he added, a reference to the party of former President Luiz Inacio Lula da Silva, who had allowed Battisti to remain in Brazil.