A European Arrest warrant had been issued for in April.
It is understood he was taken in by police in the holiday resort of Fuengirola today.
The 58-year-old’s extradition was sought by gardaí investigating the murder of Kinahan gang member David Byrne at the Regency Hotel in February 2016.
Byrne was shot dead when a five-strong squad – including three men dressed as ERU members armed with AK47 rifles – stormed a boxing weigh-in.
Four months ago police authorities across Europe were asked to help locate Hutch on foot of the garda investigation. They had hoped that the alert would lead to Hutch’s arrest within days.
It was understood that he had been moving between locations in Spain and Turkey.
Hutch’s detention tonight is a major breakthrough in the investigation.
The Regency attack sent shockwaves through the political and policing system in Ireland.
It also sparked the Kinahan-Hutch feud and a brutal cycle of violence and a further 18 murders.
Independent.ie also understands that Hutch is likely to face further serious charges when he is returned to this jurisdiction, including attempted murder and possession of firearms.
A detailed investigation file compiled by the team of detectives based at Ballymun was submitted to the DPP late last year.
Gardaí believe the Regency attack was planned in revenge for the murder of Hutch’s nephew, Gary, by associates of Kinahan’s men in September 2015. This was followed by an attempt to assassinate Gerry Hutch in Lanzarote three months later.
The feud resulted in the deaths Hutch’s brother, Eddie, three of his nephews and two of his best friends.