Separately, the US identified him as Ardit Ferizi, thought to head a hacker group called Kosova Hacker`s Security (KHS).
Mr Ferizi will be extradited to the US.
A statement from the US Department of Justice said Mr Ferizi, known by his moniker "Th3Dir3ctorY", hacked into a US company`s systems in order to take the personal details of 1,351 US military and government staff.
He will be charged with computer hacking and identity theft, and faces up to 35 years in jail, the statement added.
`Right hand man`
Mr Ferizi entered Malaysia in August last year to study computer science in Kuala Lumpur, Malaysian police said.
Between June and August this year, Mr Ferizi is alleged to have passed the data on to IS member Junaid Hussain, also known as Abu Hussain al-Britani, who later posted the details online along with a threat to target the officials.
"Early investigation found the suspect communicated with one of the right-hand man of IS terrorist group in Syria to hack a few servers containing information and details of US security personnel and team," Malaysian police said.
"The details were then transferred to the operation unit of the IS group for further action," they added.
Malaysia has arrested more than a hundred people this year, suspected of links to IS, including ten people in August - six of them members of Malaysia`s security forces.
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