Retired police lieutenant colonel Dmitry Pavlyuchenkov is suspected of organizing the criminal group that carried out the murder as well as obtaining the murder weapon, said the spokesman for the Investigative Committee Vladimir Markin, AFP reports.
Investigative journalist Politkovskaya, 48, was shot dead in October 2006 in the lift of her apartment block in Moscow but so far the mastermind has not been caught and no convictions have been secured.
Two Chechen brothers and another former police officer were acquitted of charges in relation to her murder in 2009.
The case was reopened after a court overturned the verdict.
A third Chechen brother, Rustam Makhmudov, was arrested in May on suspicion of carrying out the murder, the Moscow Times reports.
"According to the investigation, Pavlyuchenkov received the order to organize the killing of Anna Politkovskaya from an unknown individual in exchange for a monetary reward and gave his agreement," he said in a statement carried by Russian news agencies, BBC reports.
The arrest, made on Tuesday, was first announced by the editor-in-chief of the small Russian newspaper where Politkovskaya worked, Novaya Gazeta, AFP reports.
Markin said that Pavlyuchenkov is suspected of hiring the Makhmudov brothers to carry out the crime and also obtaining the pistol allegedly used by Rustam Makhmudov.
"Pavlyuchenkov promised the Makhmudov brothers a monetary reward for carrying out the order," said Markin.
According to Markin, Pavlyuchenkov told the brothers where Politkovskaya lived in central Moscow as well as the make of car that she drove. The group was then able to trail her to confirm her routine before the murder was carried out.
Pavlyuchenkov was a witness in the trial against the three suspects where, according to the Novaya Gazeta, he sought to present himself as a valuable source and gave information that was made-up.
Politkovskaya had won international prizes for her reports accusing Prime Minister Vladimir Putin of using the Chechen conflict to quash democracy while he was president, AFP reports.
Putin declared the killing was "an unacceptable crime that cannot go unpunished" but also described her influence on Russian politics as "insignificant", AFP reports.