Former world champion Aregawi joins an ever-growing list of sportspeople to have tested positive for the drug this year.
As well as Maria Sharapova, others include the 2015 Tokyo marathon champion Endeshaw Negesse, Ukrainian biathletes Olga Abramova and Artem Tyschcenko, as well as Russian ice dancer Ekaterina Bobrova.
Ethiopian-born Aregawi had already failed an initial doping test two weeks ago.
"Two samples were taken, an A and a B sample. The A sample had already come back positive, and is usually the case when that happens, the B sample has now also come back positive," said Tommy Forsgren, the doping manager for the Swedish Athletic Association.
"Unfortunately, we're not surprised."
Aregawi, a 1500m specialist, now risks a suspension of up to four years.
She assumed responsibility for the doping on Wednesday.
"I previously received pills from a doctor in Ethiopia. I thought they were vitamins. It's my own fault that I took these pills without checking," Arewagi said in a statement released by the Swedish Athletic Association.
The 25-year-old, who competed for Ethiopia at the London 2012 Olympics, was world champion in 2013 in Moscow, but finished only sixth in Beijing last year.
She also won the European Championships and the World Indoors titles over her favourite distance.
Aregawi switched allegiances to Sweden soon after the Olympics, through her marriage to a naturalised Swede of Ethiopian origin, of which she was accused of doing just to gain citizenship.
Five-time major champion Sharapova said the change in WADA's banned list for 2016 led to an inadvertent violation, for which she will be "provisionally suspended."
Tennis legend Sharapova has said she had been taking meldonium for ten years for health reasons.
The founder of meldonium argues that the drug does not help boost performance.