POLICE in Nicaragua have arrested Eric Justin Toth, an American on the FBI's most wanted list, who is sought on child pornography charges.

Toth, a former schoolteacher and camp counsellor was taken into custody in the northern city of Esteli, police said on Monday.

The suspect was transferred to Managua where he was due to appear before the press ahead of his extradition process.

The FBI said on its website that Toth was a computer "expert ... wanted for allegedly possessing child pornography in Washington, DC."

"It is alleged that in June of 2008, pornographic images were found on a school camera that had been in Toth's possession. Toth also allegedly produced child pornography in Maryland," the US federal police agency added.

A $US100,000 ($A97,775) FBI reward had been posted for information leading to his arrest.