Traynor, who has been a fugitive from a British prison for 18 years, is awaiting extradition, The Independent reported. He is believed to have lived in Dublin for four years, fleeing to the continent after Guerin was shot in 1996.
Irish police said they believe Traynor tipped off the shooter about Guerin's movements. Two years ago, Martin Gilligan, another gangster who was acquitted in the Guerin case, accused Traynor of being involved and of setting him up.
Traynor has not been formally charged with Guerin's killing. At the time of her death, he was seeking a court injunction, claiming information she planned to publish would put him at risk.
In 1992, Traynor was serving a seven-year term in England for possession of stolen bearer bonds when he failed to return from a short leave. At the time, he was considered a low-risk prisoner.
The Irish Times, citing a source in the British security services, said Thursday Traynor's arrest was part of a joint British-Dutch investigation into criminal organizations involved in both countries.