A police source said that the 47-year-old, born in Montenegro but with French and Macedonian citizenships, was detained at his home in the southern Montpellier region .
The source said the suspect failed to escape out a window during his arrest.
A former member of the French Foreign Legion, the suspect was wanted in several countries, including under two international arrest warrants issued by Switzerland, where he had been in prison for armed robbery.
On , he had escaped with four other prisoners from the Bois-Mermet prison, near Lausanne, using weapons and tools passed to them from accomplices on the outside.
Two of the escapees were detained the next day and two remain at large, including a 45-year-old Serb also believed to be a member of the Pink Panthers.
The Pink Panthers emerged from the conflict in the former Yugoslavia to become the most successful jewel thieves in the world.
According to Interpol, they have since 1999 snatched jewels with a value in excess of 330 million euros ($440 million) in heists that are often executed with breathtaking speed and precision.
They gained their nickname with a raid on a London branch of Graff Diamonds in 2003, in which two of them posed as wealthy would-be customers, persuading staff to open doors for them before helping themselves to diamonds worth millions.
Although one of the robbers was overpowered at the scene and another later arrested, only a fraction of the diamonds were recovered, one of them hidden in a pot of face cream.
That was reminiscent of a scene from the 1975 film "The Return of the Pink Panther" and resulted in a nickname that the gang members themselves adopted, wearing pink shirts for a subsequent raid in Zurich.