Malaysian Police Narcotics Supt Nafisah Adam announced that former Perth man Dominic Jude Christopher Bird, 32, was in custody, along with three local men.
The four were arrested last Thursday over a string of alleged drug offences.
Nafisah said Bird had been caught with the methamphetamine “in his hands” at a coffee shop in Kuala Lumpur, and a search of his house had uncovered a “smaller volume” of drugs.
Under Malaysian law, a person convicted of possessing more than 50g of methamphetamine is declared a drug trafficker and faces a mandatory death sentence.
“He is being held and tentatively we will charge him, but it depends on the contents of the substance on him,” Supt Nafisah said.
“But I can say (if the drugs are confirmed), definitely he will be charged.”
Malaysia has executed three Australians for drug offences in recent decades.
Kevin Barlow and Brian Chambers were hanged in July 1986, followed by Michael McAuliffe in June 1993.