The Tigers said in a statement he was arrested near a hotel in Kuala Lumpur, Malaysia, and handed over to the Sri Lankan military.
Al Jazeera's correspondent David Chater, reporting from the Sri Lankan capital, said: "He is being questioned at the special interrogations centre.
"The details he might tell will be very valuable indeed for the government's continuing efforts to try and stop a revival in the civil war and the revival of the Tamil Tigers.
"There were very murky circumstances - he was apparently holding a little conference with two men from Britain in a hotel room in Kuala Lumpur when he got a phone call.
"He walked out of the room and that was the last they ever saw of him.
"The person on the other end of that call was a friend of his who said he heard a large 'thump' and then the line disappeared," Chater said.
"Next, we heard of Pathmanathan suddenly turning up in Bangkok and then we heard that he had arrived with a hood over his head and hands behind his back, coming off the steps of a military aircraft in the military airport here in Colombo."
Pathmanathan, 55, was also wanted by the Indian government in connection with the 1991 assassination of former prime minister Rajiv Gandhi by a Tamil suicide bomber.
He was believed to control the LTTE's substantial overseas assets as well as a lucrative fund-raising network among expatriate Tamils.
As one of the most senior remaining members of the LTTE, Pathmanathan declared himself the secretary general of a revamped outfit which would try non-violent means to achieve its goal of a separate state for Sri Lanka's minority Tamils.
He was the first LTTE official to acknowledge the death of Vellupillai Prabhakaran, the Tigers founder and leader.
Prabhakaran, along with most of the Tigers' senior leaders, was killed in the closing days of Sri Lanka's offensive against the separatists in the country's northeast.
The announcement of Pathmanathan's capture comes ahead of Sri Lanka's first post-war election.
|Sri Lanka's president has vowed to resettle 80 per cent of the refugees by year's end [EPA]
Voting for local councillors is to take place on Saturday in Uva province and the towns of Jaffna and Vavuniya, on the outskirts of the area formerly controlled by the Tigers.
The elections in the country's north are the first in the towns since 1998 and part of a pledge by Mahinda Rajapaksa, the president, to devolve power to the Tamil-majority area.
Rajapaksa has also promised to let civilians, who lived in the northern areas the LTTE ran as a de facto state for many years, vote in a future province-wide election.
But around 250,000 Tamils displaced by the war are still being held in military-guarded so-called refugee camps, despite Rajapaksa's promise to resettle 80 per cent of them by the end of the year.
The government has maintained it will do so despite the need to clear tens of thousands of landmines planted across the country's north.