A Mexican cartel member suspected of killing a Border Patrol agent in 2010 with a gun supplied by the US government through a botched sting known as 'Operation Fast and Furious' has been arrested in Mexico, according to a US marshal.

Heraclio Osorio-Arellanes, who was captured on a ranch bordering the Chihuahua and Sinaloa states on Wednesday, may be facing extradition to the US for the death of Brian Terry, US Marshal David Gonzalez said.

Two guns were found at the scene of Terry's death, which exposed the Bureau of Alcohol, Tobacco, Firearms and Explosives' (ATF) operation, which allowed criminals to buy up to 2,000 guns in Arizona.

The federal government hoped to track the firearms once they made their way into Mexico, but the agency lost track of more than 1,400 of the guns.

Heraclio Osorio-Arellanes (left), accused of being the gunman who killed Border Patrol agent Brian Terry (right) in a 2010 shootout, was captured in Mexico on Wednesday

Osorio-Arellanes, who was arrested without incident on Sunday, 'is suspected of being the triggerman in the killing of Brian Terry," Gonzales said.

The US Marshal told Reuters that Mexican and US authorities worked together to track down the cartel member, adding that the United States would seek his extradition.

Osorio-Arellanes is accused of being part of a five-man cartel 'rip crew' - out to rob drug dealers along the border - who confronted Terry and three other Border Patrol agents on December 14, 2010 in a shootout north of Nogales, Arizona.

Two weapons discovered at the scene were later connected to the bungled gun-running Operation Fast and Furious that embarrassed the Obama administration and strained relations with Mexico.

Revelations of the operation created a political firestorm, leading to congressional investigations and turnover within the ATF and Justice Department.

Three other members of the rip crew and a fourth man charged with conspiracy in the fatal gun battle were ultimately convicted in U.S. federal court and sent to prison.

The sixth man wanted in the case is believed to remain at large.