A decision to investigate 30 alleged former guards at Auschwitz was prompted by the case of Ukraine-born John Demjanjuk.
Demjanjuk was the first Nazi war criminal to be convicted in Germany without evidence of a specific crime or victim but purely on the grounds he had served as death camp guard.
He died last year, aged 91, while appealing against a five-year jail sentence for complicity in the murder of more than 28,000 Jews at the Sobibor camp in Poland.
German justice officials have called for 30 alleged former Nazi guards to face prosecution for their role in facilitating mass murder at the Auschwitz death camp during World War Two.
The Special German prosecutors' office that investigates Nazi war crimes is recommending pursuing charges against 30 alleged former Auschwitz guards, according to justice officials.
Prosecutors investigated 50 former guards and decided pursue 30 cases, the Baden-Wuerttemberg Justice Ministry said.
Renewed investigations of death camp guards come after the case of John Demjanjuk, who died last year while appealing his 2011 conviction on allegations he served in Sobibor.
His case established that death camp guards could be convicted as accessories to murder, even where there was no specific evidence of atrocities against them.
Efraim Zuroff, the chief Nazi hunter with the Simon Wiesenthal Centre, has welcomed the arrest of Hans Lipschis over allegations he served as a Auschwitz death camp guard.
Lipschis number 4 on his current list of "most wanted Nazi war criminals".
Mr Zuroff told the Associated Press: "This is a very positive step, we welcome the arrest. I hope this will only be the first of many arrests, trials and convictions of death camp guards".
A 93-year-old man alleged Auschwitz death camp guard has been arrested by German authorities, the Associated Press reports, citing Stuttgard prosecutors.
Hans Lipschis was taken into custody after it was concluded there was "compelling evidence" he was involved in crimes at Auschwitz while there from 1941 to 1945, prosecutor Claudia Krauth said.
Lipschis has acknowledged being assigned to an SS guard unit at the camp but maintains he only served as a cook and was not involved in any war crimes.
Germany has arrested an alleged former Auschwitz guard on suspicion of accessory to murder.