Forensic evidence indicated the man was a leader of the Knights Templar Cartel whom the government had claimed was killed in 2010.
The authorities are awaiting DNA tests for final confirmation they have the body of Nazario Moreno Gonzalez, but they said that having recovered the body this time around they had identified him using fingerprints they had from his military service.
Moreno's death would be one of the more bizarre twists in Mexico's assault on drug cartels, in which two others of the country's most powerful capos have been captured in the last year without a shot fired.
Officials said the shoot-out that killed Gonzalez happened near the farming hub of Apaztingan in the heart of western Michoacan state, where the Knights Templar have ruled through stealing, killing and extortion.
Moreno would have been 44 on Saturday. He led the La Familia cartel when he supposedly perished in a two-day gunbattle with police in December 2010 in Michoacan, his home state.