Prosecutors in Annecy described the suspect as a local resident, the Guardian reported. He was arrested outside his home in Lathuile, a village near Chevaline.
The Guardian cited French media reports that said the 48-year-old was fired last year as a village police officer in Menthon-Saint-Bernard. He was described as an arms collector, and reports said police found weapons in his home.
Prosecutor Eric Maillaud said the suspect was arrested after police released a digital facial composite of a man wearing a motorcycle helmet who was seen in the area shortly before the killings.
Saad Al-Hilli was staying in Annecy with his family when he was shot to death on Sept. 5, 2012, after parking his car near a wooded road. His wife and mother were also killed, but his two daughters survived.
The body of French cyclist Sylvain Mollier was found nearby.
Police cautioned that the arrested suspect may be able to shed light on the slayings, but may not be a direct suspect in the actual killings.
Al-Hilli's brother, Zaid, was arrested in June by police in Britain but was released last month when authorities decided there was not enough evidence to charge him. The brothers were in the midst of an inheritance dispute at the time of the killing, the Guardian said.