Felicien Kabuga, once one of Rwanda's richest men, was living under a false identity in the Paris suburbs, the public prosecutor's office and police said in a joint statement.
"Felicien Kabuga is known to have been the financier of the Rwandan genocide," it said, adding that he had spent time in Germany, Belgium, the Democratic Republic of Congo, Kenya and Switzerland.
Kabuga was indicted by the UN International Criminal Tribunal for Rwanda in 1997 on seven counts including genocide.
"The arrest of Felicien Kabuga today is a reminder that those responsible for genocide can be brought to account, even 26 years after their crimes," said Serge Brammertz, chief prosecutor of the MICT in The Hague.
Along with former defence minister Augustin Bizimana and top-ranking military figure Protais Mpiranya -- both still at large -- Kabuga was one of the three most significant suspects still sought over the genocide, the statement said.
