The Metropolitan Police said a 71-year-old man had been arrested by appointment Tuesday morning at a London police station. They did not name him in keeping with the British police practice of not identifying suspects who have not been charged.
Sky News, which is 39 percent owned by the newspaper's parent company, News Corp., identified him as former News of the World managing editor Stuart Kuttner.
Kuttner retired in 2009 after 29 years at the News of the World, 22 of them as managing editor.
News International - Murdoch's British newspaper division - would not confirm the arrested man's identity.
Police said he was in custody and being questioned on suspicion of conspiring to intercept communications - phone hacking - and on suspicion of corruption, which relates to claims that journalists bribed police officers for information.
Detectives investigating claims the Rupert Murdoch-owned newspaper illegally eavesdropped on the phone messages of celebrities, politicians and even crime victims have previously arrested 10 people, including Murdoch's former British newspaper chief Rebekah Brooks and Andy Coulson, an ex-News of the World editor who went on to be Prime Minister David Cameron's communications chief.
Coulson was the paper's editor when royal reporter Clive Goodman and private investigator Glenn Mulcaire were arrested and jailed in 2007 for hacking the phones of royal staff. The newspaper claimed for years that hacking was limited to those two rogue staff, but have now admitted it was more widespread.
All those arrested have been released on bail and no one has yet been charged.
Murdoch closed down the 168-year-old News of the World last month in an attempt to contain the spreading scandal, which has forced him to abandon a bid for full control of British Sky Broadcasting and accept the resignations of two top executives - Brooks and Wall Street Journal publisher Les Hinton.
It has also triggered the resignation of Britain's most senior police officers amid claims of too-cozy ties between the London force and News International.
Police, who have been criticized for failing to uncover the extent of hacking in their original investigation, are now running parallel inquiries into hacking and police bribery.
Last week they opened a third related investigation to examine allegations of computer hacking.
It follows claims by a former army intelligence officer that an investigator working on behalf of a news organization had hacked his computer using an email containing a Trojan program - malicious software that can allow outside access to a target's machine.
Meanwhile, an activist who hit Murdoch with a shaving foam pie as the mogul testified to British lawmakers has been sentenced to six weeks in jail.
Jonathan May-Bowles pleaded guilty last week to assaulting the 80-year-old media tycoon as he gave evidence to the House of Commons Culture, Media and Sport Committee in July.
Handing down the sentence at London's City of Westminster Magistrates' Court, district judge Daphne Wickham criticized May-Bowles for disrupting "a parliamentary process, which as you know conducts itself with dignity and in a civilized fashion."
The judge said she took into account the fear of injury felt by Murdoch, who could not have known what was in the foam pie.
She said May-Bowles would serve half the sentence.