Former Croatian general Vladimir Zagorec was expected to be extradited to Zagreb to face embezzlement charges Saturday following his arrest, Austrian officials said.
Zagorec, accused of stealing more than five million dollars (3.25 million euros) while he was Croatia's deputy minister of defence between 1993 and 2000, had been unsuccessfully fighting extradition for months through the Austrian courts.
The interior ministry said he had been arrested late Friday and placed in custody pending his extradition.
Prosecution spokesman Gerhard Jarosch said he was expected to be taken to Zagreb later Saturday and brought before a Croatian judge once the formalities were completed.
Zagorec, 44, who has an estimated fortune of 26 million euros, arrived in Austria in 2000 and had been working as a property developer.
He was arrested in March last year on an international warrant issued by the Croatian judiciary for alleged embezzlement dating back to the war in the former Yugoslavia, when he was in charge of arms procurement.
Zagorec had been on bail of one million euros while he fought his extradition up to the Austrian supreme court, saying his fundamental rights had not been respected.
The court turned down his last appeal in March.