The arrest occurred at 10pm, upon the man's return from a trip abroad, according to chief investigator Anders Wretling.
The suspect is in his fifties, and lives in Gävle, in central Sweden. According to the police he has both Swedish and Rwandan citizenship.
The remand hearing is expected to be held in Stockholm as early as Friday, "if there's time", according to Wretling.
If not, the hearing will be held over Christmas.
According to Wretling, plenty of work remains to be done in the investigation, which has been going on since April.
Swedish police have visited Rwanda several times.
"We're happy to be able to give a clear signal that Sweden is no safe haven for war criminals," said Wretling to the TT news agency.
The suspect was interrogated shortly after his arrest, and denies all crimes. His lawyer Tomas Nilsson assisted him in a police interrogation on Friday afternoon.
"As you surely understand, I can't tell you what was said, except that my client denied all crimes," said Nilsson to TT. This was the first time he met with the suspect.
This case is the third major case since Swedish police formed a special war crime commission.
Earlier this year, a Bosnian was sentenced to five years in prison for war crimes, the second person to have been convicted of that particular crime in Sweden after Jackie Arklöv.
A Kosovo Serb is also suspected of participating in a 1999 massacre during the Kosovo War, and will receive the court's ruling on 20 January.
During the genocide in Rwanda in 1994, some 800,000 people were murdered. The genocide was carried out by extreme nationalists from the majority people, the Hutu. Victims were mainly from the minority group Tutsi.
The highest leaders from the genocide are put before the UN's special Rwanda tribunal in Tanzania.