The 54-year-old Jovo Begovic of Petrinja was arrested on Monday on an international warrant in Dreiech in the Rhine-Main Region, where he was living with his family, the spokesman for the South Hessen district police, Josef Michael Roesch, told Hina on Friday.
Begovic was taken to an investigating judge, who placed him in custody in Darmstadt, where he is awaiting extradition to Croatia.
Roesch said German judicial officials had contacted their Croatian colleagues about the extradition.
In 2001, Begovic was sentenced in Croatia to 20 years in jail after it was found that he had been responsible for the shelling of civilian targets in 1994. The attack left at least four people killed and 13 gravely wounded.
After the 1995 liberation of Croatian areas occupied by Serb rebels, Begovic fled to Belgrade where he lived until 2001. He then went to Germany, where he married a woman from Serbia and Montenegro who has been living there for years. He has been living in Dreiech since June 2004.