The announcement was made by Mexico's National Security Commission via Twitter.
"(We) have executed the arrest warrant against Felipe Flores, former Iguala police chief," the commission tweeted.
The attorney general offered a reward of up to $2.5 million pesos
(about $134,392 dollars) last year for any information that led to his capture.
Felipe Flores Velázquez was captured as he was visiting his spouse in Guerrero, the state where the students went missing in 2014, National Security Commissioner Renato Sales Heredia said at a news conference.
Mexican federal authorities made the arrest in coordination with the attorney general's office, the country's navy and the Center of National Investigation and Security, an intelligence-gathering agency.
No shots were fired.
How did the students go missing?
In November 2014, Mexico's then-Attorney General Jesus Murillo Karam said the 43 students were abducted on orders of local mayo
r Jose Luis Abarca .
Authorities say he wanted to prevent the students
from disrupting an event by his wife the night they went missing.
The mayor then turned the students over to a gang who killed them, burned their bodies in a landfill and tossed some their remains into a nearby river, Karam added.
Tomás Zerón de Lucio, the head of Mexico's Criminal Investigations Agency, said two months later that the incident was a case of mistaken identity.
He said the criminal group accused of executing the students thought they belonged to a rival gang, also operating around the city of Iguala where the students were last seen.
"We can conclude that the motivation was consistent (with the theory that) the students were identified by the criminals as members of an organized crime rival group that operated in the region. That was the reason why they were deprived of their freedom, initially, and then of their lives," Zerón de Lucio said in early 2015.
There is no indication that the mayor wanted all of the students dead
, authorities said, but the gang mistook them for a rival group and executed them.
What was the role of the former chief?
Flores Vasquez helped protect city's police officers who were connected with the students' disappearance, authorities said.
He also colluded with the city's mayor to persecute and attack the students and ordered local police to stop them from attending the protest.
The former chief is being charged with organized crime and kidnapping, officials said Friday.
Some 130 others have been arrested in connection with the case, Sales Heredia, added.