Serbian President Boris Tadic confirmed the arrest of the former Bosnian Serb army chief at a news conference.
Gen Mladic is accused of a key role in the massacre of at least 7,500 men and boys at Srebrenica in 1995.
He was the most prominent Bosnian war crimes suspect at large since the arrest of Radovan Karadzic in 2008.
President Tadic said work was under way to extradite Gen Mladic to the international war crimes tribunal in The Hague.
The detention, he said, had closed one chapter in Serbian history, bringing the country and the region closer to reconciliation.
It had also opened the doors to membership of the European Union, he added.
Nato chief Anders Fogh Rasmussen hailed the arrest, saying it finally offered “a chance for justice to be
Gen Mladic was said by Serbian media to have been arrested in Vojvodina, a northern province of Serbia, in the early hours of Thursday morning.
President Tadic would only confirm he had been arrested “on Serbian soil”.
He was reportedly using the assumed name Milorad Komodic.
Gen Mladic was indicted by the UN war crimes tribunal in The Hague in 1995 for genocide over the killings that July at Srebrenica – the worst single atrocity in Europe since World War II – and other crimes.
Having lived freely in the Serbian capital, Belgrade, he disappeared after the arrest of former Yugoslav President Slobodan Milosevic in 2001.
Speculation mounted that Gen Mladic would soon be arrested when Mr Karadzic was captured in Belgrade in July 2008.
|Ratko Mladic (left), pictured with Bosnian Serb leader Radovan Karadzic in 1994, has been arrested in Serbia. Photograph: Reuters|
Just before news of Thursday’s arrest, UN war crimes chief prosecutor Serge Brammertz accused Serbia of failing to do enough to find Gen Mladic.
“The capture is the biggest obligation of Serbia,” he said in a report sent to the UN Security Council.
“Until now efforts by Serbia to detain fugitives have not been sufficient.”