A suspected organised crime boss in the Brazilian city of Rio de Janeiro was killed on Friday in a shoot-out with police as they tried to arrest him, local authorities said.

Rio's civil police said in a statement that Rui Paulo Goncalves Estevao, also known as Pipito, was the alleged head of an organized criminal group accused of extortion and sowing terror in the city.

"When he was approached, he attacked the agents and a confrontation ensued. The criminal was hit and taken to a local hospital, but died of his wounds," police said.

Rio Governor Claudio Castro said police had dealt a "hard blow against criminals who disturb the peace of the population".

Castro wrote on social media site X that Pipito earlier "gave the order to burn 35 buses" in western Rio neighbourhoods in retaliation for the death of a relative of another alleged crime boss, who is in prison.

Rio's organised crime groups, known as militias, were founded about four decades ago by former law enforcement officers and originally presented as self-defence organizations to fight against violent drug traffickers.

In reality, they function as mafias that control various businesses through extortion.

The militias have also seized public land to illegally build housing or commercial buildings, with real estate becoming a key source of revenue. (AFP)