The arrest of Ratko Mladic, the last of the three men blamed for instigating the ethnic cleansing during the 1992-5 Bosnian war, was expected to clear the way for the former pariah state of Serbia to join the EU.
Mladic , accused of orchestrating the massacre of 8,000 Muslim men and boys in the town of Srebrenica and a brutal 43-month siege of Sarajevo, was found in a farmhouse owned by a cousin, police said.
EU foreign policy chief Catherine Ashton said she expected Mladic to be extradited to the International Criminal Tribunal for the former Yugoslavia in The Hague within two weeks.
Serbian President Boris Tadic confirmed that Mladic, 69, had been detained in Serbia, which had long said it could not find a man who is still seen as a hero by many Serbs and whose Bosnian Serb Army was armed and funded by the late Serbian president Slobodan Milosevic , who died in 2006 while on trial for war crimes.
"This removes a heavy burden from Serbia and closes a page of our unfortunate history," Tadic said.
The arrest may have come too late to place the general jointly on trial alongside his former political leader Radovan Karadzic, according to the Yugoslavia tribunal's prosecution office.
Serbia being granted candidacy status to the EU was always dependent on them handing over Milosevic, Karadzic and Mladic for trial in The Hague.
If and when Mladic goes the hat-trick means they will almost certainly be granted this status, even though there is one major war criminal still wanted, Goran Hadzic.
However, his continued evasion will not prevent the application by Serbia to the EU, even though there is tension with the Netherlands over the issue.
The Dutch, whose government fell over its failure to prevent the atrocity at Srebrenica, always threatened to veto Serbia's application.
However, they can be expected to be persuaded by other EU members to drop their opposition to the Serbian application.
Serbia, meanwhile, is not guaranteed an easy ride in the application process as there are still unresolved issues relating to Kosovo, Nato and Russia.
