A spokesman for the Hague tribunal confirmed Djordjevic had been detained and was due to be handed over imminently.
Djordjevic, Serbia's former deputy interior minister and police commander, was believed to have fled to Russia in 2001, after the discovery of several mass graves containing the remains of hundreds of Kosovo Albanians.
He was indicted in October 2003 for his role in the forced deportation about 800,000 civilians from the province.
At least 10,000 civilians, overwhelmingly ethnic Albanians, died in the Kosovo conflict, which prompted Nato's first war and ended with the UN taking control of the breakaway province.
Montenegrin police said Djordjevic had been living in Budva, a tourist resort on the Adriatic coast, under a false identity.
He had grown a beard and been posing as a construction worker for the past few months, Serbia's Beta news agency reported.
Earlier this month, Zdravko Tolimir, a former Bosnian Serb general, was delivered to The Hague to answer to genocide charges.
Djordjevic's arrest means that only four fugitives, including former Bosnian Serb military chief Ratko Mladic and his war-time political leader Radovan Karadzic, remain on the run from the UN tribunal.