Ratko Mladic was captured in a routine raid as he headed out to his garden for a pre-dawn walk, three Serbian police officials said.
The anonymous officials said they had no specific intelligence indicating Mladic was in the house, which belonged to a relative, before they burst into four houses in the village of Lazarevo simultaneously.
They said Mladic identified himself immediately, speaking in a whisper, and was carrying two pistols that he handed over to police.
They added that four white jeeps carrying about two dozen masked special Serbian policemen drove slowly into Lazarevo, a remote northern Serbian village, at 5am on Thursday when most of its 2,000 people were still asleep. It was the first time Serbian police had raided the village, the officials said.
Mladic was awake inside a yellow brick house with a rusty white fence, unable to sleep because his body ached from ailments he has suffered over the 16 years he spent on the run from justice, the officials said.
The police officials said they had learned that Mladic moved into the largely Bosnian Serb village of Lazarevo about a year ago, figuring he could be safe with his relatives there.
Mladic was about to venture into the grassy yard for some fresh air when four men in masks and black fatigues without insignia jumped over the fence and burst into the house, grabbing the frail-looking man and forcing him to the floor face down.
Meanwhile, Serbian officials say no one will pick up the $10m reward for Mladic’s arrest because police were not acting on a tip when they arrested him.
Government spokesman Slobodan Homen said security officers who carried out the operation “were only doing their job in accordance with the constitution and the law”, and that no one person was responsible.