Former Libyan ambassador to Egypt Ali Maria was arrested on Tuesday morning in Cairo.
Maria, who was ambassador under deposed leader Muammar Gaddafi, is accused of a number of crimes related to the former Libyan regime and is currently wanted by the Libyan government.
After several hours of negotiations at his residence in Sheikh Ziyad, a satellite city on the western outskirts of Cairo, Maria handed himself over to security forces.
The Egyptian authorities will hand him over to Interpol.
Ahmed Gadhaf Al-Dam, a close aide and cousin of former Libyan ruler Gaddafi, was also arrested in Cairo on Tuesday.
The new Libyan administration has been demanding the extradition of Gadhaf Al-Dam and Maria from Egypt to face trials for alleged involvement in crimes during the Gaddafi era.