Serbia has been under intense pressure from the international community to catch the fugitive. Mladic has been on the run since 1995 when he was indicted by the U.N. war crimes tribunal for genocide in the slaughter of some 8,000 Bosnian Muslims in Srebrenica and other crimes committed by his troops during Bosnia's 1992-95 war.
"On behalf of the Republic of Serbia we announce that Ratko Mladic has been arrested," Boris Tadic told reporters. He said the arrest was made by the Serbian Security Intelligence Agency.
"We ended a difficult period of our history and removed the stain from the face of the members of our nation wherever they live," he said.
Mladic personally led his troops in the Serb onslaught against the U.N.-protected enclave of Srebrenica in an enclave supposedly protected by U.N. peacekeepers. Thousands of Muslim men and boys were killed there and the town's name has become nearly synonymous with the horrible bloodshed of the Balkan conflict.
Serbia has been under intense scrutiny over Mladic, with the chief U.N. war crimes prosecutor, Serge Brammertz, complaining earlier this month that authorities were not doing enough to capture him and other war crimes fugitives.
Brammertz was scheduled to report next month to the U.N. Security Council about the Balkan country's efforts.
Brammertz's regular reports on Serbia's compliance are crucial for the Balkan country's efforts to become an European Union member candidate. The EU has conditioned Serbia's membership bid on the arrest.
With Mladic's arrest, "we have opened the door for the negotiations and membership in the European Union," Tadic said.
Prosecutors have said they believed he was hiding in Serbia under the protection of hardliners who consider him a hero. Mladic was last seen in Belgrade in 2006.
Croatian media, which first broke the story, said police there got confirmation from their Serbian colleagues that DNA analysis confirmed Mladic's identity. Belgrade's B92 radio said Mladic was arrested Thursday in a village close to the northern Serbian town of Zrenjanin.
In Brussels, NATO Secretary-General Anders Fogh Rasmussen hailed the arrest, saying Thursday that almost 16 years since Mladic's indictment for genocide "his arrest finally offers a chance for justice to be done."
Tens of thousands of NATO troops were deployed to Bosnia in 1995 to safeguard a U.S.-sponsored peace agreement between that nations' warring factions. They have since been withdrawn abd replaced by a much smaller European Union force.
The United Nations had declared Serb-besieged Srebrenica, some 90 kilometers (60 miles) northeast of Sarajevo, a protected area for civilians. But the few hundred Dutch Blue Helmets on the ground were left short of credible weaponry or a clear mandate to protect the town.
Srebrenica fell to the Serbs after senior U.N. commanders dithered on Dutch requests for air strikes and its overwhelmingly Bosnian Muslim residents swarmed the U.N. military base, seeking refuge. But the peacekeepers allowed the Serbs to take away the townspeople when Mladic said they would not be harmed.
The shootings began shortly after, and the bodies of the victims were bulldozed into mass graves.
Since then, the bodies of thousands of the victims have been recovered, identified through DNA tests and laid to rest.