More than 2000 bags of kava have been seized in a remote community in a major blow to the illegal supply of the intoxicant, police say.

A tip off led to police discovering a huge haul of the alcohol substitute worth more than $100,000 in the Arnhem Land community of Ramingining, located about 550km east of Darwin.

"Police received information alleging a man was selling kava from a residence in the community," a Northern Territory Police statement said.

The property search discovered 2207 individual bags of kava with an estimated street value of about $110,000 along with $10,670 in cash, police said.

A man was found in the bedroom with kava and the money, with officers also seizing a logbook that allegedly recorded sales.

The man was arrested at the scene and has been refused bail.

Under the NT's Kava Management Act, the maximum penalty for supplying a commercial quantity of kava is up to eight years in prison.

"This was an outstanding result by our local members, who acted quickly on information from the community," Acting Superintendent Daniel Bell said.

"We rely on information from the public to identify this type of offending, and this result shows exactly what can be achieved when the community works with police."

Kava, an extract from the root of a pepper plant found on Pacific Islands, was introduced to Aboriginal and Torres Strait Islander communities in northern Australia in the early 1980s as a substitute for alcohol.

It has traditionally been cultivated by Pacific Islanders for use as a social and ceremonial drink, either ground or chewed up and mixed with water or coconut milk.

The effects of kava include muscle relaxation, sleepiness and feelings of wellbeing.

The Department of Health's Office of Drug Control says on its website that incoming passengers can bring up to 4kg of kava powder into most of Australia for personal use, but this is not allowed in the NT.  

The man is set to appear in Darwin Local Court on Wednesday.