Carlos Nuzman was seized in Rio de Janeiro on suspicion of corruption, money laundering and criminal association.
Twenty officers acting on orders from a federal judge took the 75-year-old into custody and confiscated a range of documents including his passport.
Following an investigation dubbed "Unfair Play" that spanned several countries, Brazilian officials last month said Nuzman was the lynchpin in a plot to bribe the International Olympic Committee into awarding Rio de Janeiro last year's summer Games.
Authorities allege that the former Rio governor, Sergio Cabral, who is serving 14 years in jail for bribery and money laundering, was the mastermind of the plot in which more than 2 million euros in bribes was paid to the son of Senegalese IOC member Lamine Diack before the 2009 vote.
Rio beat off challenges from Chicago, Madrid and Tokyo to win the right to host the 2016 Games.