Abdel-Majed, originally from London, was reportedly arrested in the southern city of Almeria during a raid by anti-terrorist police.
Policia Nacional said on Twitter that a Daesh suspect had entered the country illegally and was hiding in an apartment building with two other people who were also arrested.
Although Bary has not yet been officially identified by the authorities, Jean-Charles Brisard, French international consultant and terrorism expert seems to confirm that Bary is one of the arrested suspects.
He said: “According to our information, it is Abdel-Majed Abdel Bary, son of Adel Abdel Bari, implicated in the attacks on the American embassies in Kenya and Tanzania in 1998”.
It is not immediately known how long Bary has been in Spain, but it is understood that he entered from Europe.
Bary, 29, left the UK in 2013 to join the so-called Islamic State of Syria as an infantryman.
In 2014, a sickening image emerged on Twitter of posing with his severed head.
Below, the depraved Londoner wrote: “Chillin with my other friend, or what is left. “
He added, “It’s beautiful every time you see the laws of Allah implemented. “
But in 2015, it was reported that Bary, who had once been a budding rapper, was on the run after falling out with Daesh and may have been hiding in Turkey.
At the time, he was thought to be one of the 50 “disappointed Westerners” who fled the murderous organization.
He managed to escape by disguising himself as a refugee and crossing the border during chaos when ISIS withdrew from Tal Abyad, reports said.
He was raised in Maida Vale, west London, and his father is said to have had close ties to Osama bin Laden.
Bary is the son of Adel Abdul Bary – an Egyptian who recently admitted to having played a role in the deadly attacks on American embassies in Kenya and Tanzania.
Before radicalizing, he was a budding musician and his songs were even played on BBC Radio 1.
However, once ISIS established, it gave up its musical ambitions for Allah, he has already said.
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It was believed for a time that he could have been Jihadi John.
Bary used his Twitter account to post spooky anti-Western speeches and also promised death to all “infidels” – and “beheadings in their own backyards.”