Potter is Australia's "number one" fugitive, the senior officer added.
"This man is dangerous ... he has a significant criminal history.
Potter served 15 years in Sydney's Long Bay Jail over the 1981 decapitation murder of Kim Barry, 19, in Wollongong, while on his buck's night.
He's used several aliases over the years, including Josh Lawson, John Page, Jim Henderson and possibly Peter Adams.
Police almost caught him in 2010 when he was cornered in a Queensland caravan park. He'd been using a fatsuit and a ginger beard as a disguise at the time, the Herald Sun reported.
"He has significant organised criminal connections, he has priors for murder he is wanted in connection to (trafficking a) large commercial quantity of drugs." Potter was jailed after he murdered and decapitated a woman on his bucks night in 1981.
He is one of three charged over the alleged planned murders of two men, including an associate of underworld figure Mick Gatto, related to disputes within a drug syndicate.
Potter is also wanted on federal drug charges for a record 4.4-tonne ecstasy haul, which involved 15 million tablets being smuggled in tinned tomatoes in 2008.
Convicted drug trafficker Frank Madafferi was found guilty of trafficking a commercial quantity of drugs in relation to the ecstasy bust. His brother Tony Madafferi, who has been accused in court of being a high- ranking member of Melbourne's mafia, was this week revealed to have dined with Victoria opposition leader Matthew Guy.
Victoria Police was told in 2016 Potter was living in the Griffith area. The latest sighting came through Crime Stoppers and police are urging the caller to again make contact.
Potter has most recently been described as caucasian, 175cm tall, of medium to strong build, with a fair complexion, brown eyes, brown greying hair and a ginger beard.
He is known to wear gold sleeper earrings in both ears, glasses and a gold neck chain.
There is a $100,000 reward offered for information leading to his capture. Police have warned anyone who sees Potter not to approach him but to call triple-0 immediately.
- AAP