Khalid Aedh al-Otaibi was arrested at Paris’s Charles de Gaulle airport as he was about to take a plane to the capital of Saudi Arabia, Riyadh, according to reports.
The official said the suspect, who is expected to appear before a judge later on Tuesday, was being detained on the basis of a Turkish arrest warrant.
Al-Otaibi, 33, was one of more than a dozen Saudi officials sanctioned by the US treasury in 2018 over Mr Khashoggi’s killing and dismemberment at the Saudi Consulate in Istanbul that year.
The murder provoked a global uproar and damaged the image of Saudi Arabia's de facto ruler, Crown Prince Mohammed bin Salman.
Mr Khashoggi, a former Washington Post columnist, was a critic of the prince's authoritarian consolidation of power.
Salman has said in a TV interview that he takes “full responsibility” for the grisly murder, but he denies allegations that he ordered the killing.
In 2018, he visited the Saudi consulate in Turkey in order to pick up documents needed for his wedding.
Inside the building, the journalist died at the hands of over a dozen Saudi security and intelligence officials and others who turned up before Khashoggi arrived.
His body has never been found.
In the hours leading up to the killing, CCTV cameras captured footage of Mr Khashoggi and his suspected killers in Istanbul.
A Turkish bug planted at the consulate reportedly captured the sound of a forensic saw dismembering Mr Khashoggi’s body within an hour of his arrival.
Saudi officials have said the killing was the work of rogue Saudi security and intelligence officials.
Last year, Saudi Arabian courts announced they had sentenced eight unidentified Saudi nationals to prison for Mr Khashoggi’s killing.