The 51-year-old was arrested under a European arrest warrant in Frankfurt over the death of Ansar Shah in Ayrshire on October 4 1993.
The 36-year-old, who ran the Armaan Brasserie Indian restaurant, was stabbed in an Ayr seafront car park.
Police Scotland, the Crown Office and the UK National Crime Agency were involved in the joint operation.
Europol and French and German authorities also assisted.
Police Scotland said proceedings to return the accused to Scotland will take place in due course.
Detective Chief Inspector Mark Bell of Police Scotland’s homicide governance review team said: “Police Scotland is committed to pursuing those persons who are allegedly responsible for the gravest of crimes.
“Time and location is no barrier to the efforts and determination of our staff and partners to pursue justice for victims and their loved ones.”