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Wanted in connection with two attempts on the life of President Pervez Musharraf, Libbi is said to be number three in the Al Qaeda heiarchy after Osama Bin Laden and Egyptian Ayman al-Zawahri.
He reportedly took over as Al Qaeda's operational chief in Pakistan after the arrest of Khalid Shaikh Mohammed in March 2003. Sheikh Mohammed reportedly told interrogators that Libbi was the mastermind behind the 9/11 attacks in the US.
"This is a very important day for us," Ahmed said.
Islamabad had put a reward of 20 m rupees ($340,000) on his head in August last year, but officials said it was unclear whether it would be now paid.
America's War on Terror: The Complete Coverage