He is the successor to Abu Musab al-Zarqawi, a Jordanian who was killed by a US air attack in 2006.
The pair were close associates and al-Muhajir had a US bounty of $5m on his head.
Al-Masri joined an extremist group led by al-Zarqawi in 1982 according to US officials.
He then graduated to al-Qaeda training camps in Afghanistan in 1999 before travelling to Iraq after the US-led invasion in 2003.