Police say the 59-year-old was "living quite comfortably" near the Macedon Ranges town of Gisborne before his arrest on Tuesday.

A warrant for Foster's arrest was put out on May 20 after he failed to appear in a Sydney court accused of a multi-million-dollar Bitcoin scam.

Australian Federal Police assistant commissioner Nigel Ryan said assistance from Victorian and Queensland police along with financial data had helped locate Foster in the town northwest of Melbourne.

He said Foster had probably lived at the address for "at least'' the six months the AFP had been investigating him before he was found.

"(To) say Mr Foster was surprised to see us would be an understatement," Assistant Commissioner Ryan said.

"It was a combination of a whole heap of information of which the financial information was instrumental, but obviously there was a lot of other work that went into it."

Foster remains at the Royal Melbourne Hospital being treated for an unknown medical condition he disclosed to police.

He was located with another man who is not currently known to police, but will be investigated for his role in helping Foster avoid apprehension.

Foster was initially arrested in Port Douglas in August 2020 on fraud-related charges filed in NSW.

The 15 charges were related to allegations he posed as a man called Bill Dawson and extricated 120 Bitcoin from a Hong Kong man in 2019 and 2020.

Granted strict bail in March, Foster failed to appear in May for a scheduled plea hearing in Sydney, despite being cited earlier that day by his lawyer.

As Foster started life on the run, NSW prosecutors dropped the charges and Queensland police subsequently issued a fresh warrant over the same allegations.

Days later, another lawyer for Foster told a Brisbane court his client was planning to hand himself in and plead not guilty.

Foster now faces extradition to Queensland where he faces charges of fraud.

Australian Associated Press