Merouane Benahmed had been living under house arrest in the town of Evron in northwest France since 2015.
In 2006 he was slapped with a ten-year prison sentence in France over his links to a suspected insurgent organisation known as the “Chechen Network”, thought to have been planning a chemical attack on Paris.
He was released in 2011 and has since lived in several parts of France, but had to report regularly to police.
On September 8th he failed to show up for one his mandated meetings with local police, which triggered the arrest warrant.
“Today, the Algerian citizen Merouane Benahmed was arrested in Vallorbe,” in the Swiss canton of Vaud, justice ministry spokesman Folco Galli told AFP.
“The man is currently being detained in view of extradition,” Galli added.
Federal migration office spokesman Gieri Cavelty told AFP that Benahmed was seeking asylum, while a statement from police in Vaud said he was opposing his extradition.
The 43-year-old fled Algeria in 1999 before being sentenced to death in absentia.
The European Court of Human Rights refused a request from Algeria for his extraditition due to the death sentence, said Swiss news agencies.
Algeria's Armed Islamic Group, known by its French acronym GIA, waged a deadly war against the country's secular military government through the 1990s.
It is now considered largely dormant.
Benahmed's lawyer, Isabelle Coutant-Peyre, has described her client's house arrest as “illegitimate.”