The suspect, a 40-year-old Austrian national, was detained on Thursday, a police spokeswoman told AFP on Friday.
“The Berlin officers were working on the basis of a request for legal assistance from Vienna prosecutors and on the basis of a European arrest warrant,” the spokeswoman said.
The suspect is currently being held in the German capital pending possible extradition to Austria. Police did not name the man, but Austrian media have identified him as Julian H., a private detective.
According to Austrian newspaper Die Presse, the suspect is accused of illegally filming people and trafficking three kilograms of cocaine.
In the sensational hidden-camera recording, then leader of the far-right Freedom Party (FPOe) Heinz-Christian Strache was seen appearing to offer public contracts in return for campaign help.
The video revelations led to his resignation as party leader and vice chancellor, and forced new elections in Austria that saw Chancellor Sebastian Kurz's OeVP return to office with a strengthened mandate after picking up disenchanted FPOe voters.
What is in the video?
The video, more than six hours long, was recorded in an elaborate hidden-camera sting operation in a luxury villa on the Spanish island of Ibiza in July 2017, three months before Austria's last parliamentary elections.
In the extracts published so far, Strache is seen on a sofa, enjoying liberal amounts of alcohol and Red Bull, while speaking to a woman who remains off camera.
She is introduced to him as “Alyona Makarova”, purportedly the niece of Russian oligarch Igor Makarov – who has told the Russian edition of Forbes magazine that he has no nieces.
Strache's party colleague and trusted aide Johann Gudenus and Gudenus's wife are also present.
“Makarova” – whose real identity remains unknown – is accompanied by a male associate, who also remains off camera.
The most damning segment involves Strache discussing how “Makarova” might take control of the Kronen Zeitung, Austria's largest-circulation tabloid, and use it to help the FPOe's campaign.
In return, Strache says he would arrange for public construction tenders currently awarded to Austrian giant Strabag to be given to her instead.
This despite the fact “Makarova” repeatedly makes clear that her fortune derives from dubious sources.
Strache also appears to suggest a scheme through which political donations could avoid legal scrutiny by using an FPOe-linked foundation.
Where did the video come from?
Two German newspapers, the Sueddeutsche Zeitung (SZ) and Der Spiegel,published the extracts from the video on May 17 but said they could not reveal their sources.
A Vienna-based lawyer Ramin Mirfakhrai later said he had been involved in setting up the meetings with Gudenus that led to the fateful recording in Ibiza.
Austrian press reports said Mirfakhrai's office was raided as part of an investigation into the possible “illegal use of recording equipment” and “forgery of a protected category of documents”.
An Austrian detective and two other “security experts” were also involved in the set-up, according to local media.
The Die Presse daily reported that other incriminating material on Strache had previously been offered for sale to the FPOe's political rivals, but SZ and Der Spiegel say they did not pay for the material they received.
Beate Hartinger-Klein, Heinz-Christian Strache, Karin Kneissl and Norbert Hofer give a joint press conference after the video's publication. Photo: AFP
What was the fallout?
The scandal set off a chain of unprecedented events, starting with Strache's resignation as party leader and vice-chancellor.
Then OeVP chancellor Sebastian Kurz sacked FPOe interior minister Herbert Kickl, arguing he could not oversee any possible investigation into his own party's wrongdoing, which prompted a mass walkout of FPOe ministers.
Kurz was himself then thrown out of office after the FPOe joined the centre-left Social Democrats (SPOe) in supporting a no-confidence motion against him, a first for modern Austria.
A technocratic government then took office led by Austria's first female chancellor, Brigitte Bierlein.
Austrian prosecutors have launched investigations into possible illicit donations to political parties.
Strache and Gudenus have both lodged legal complaints against those who made the video in Austria, with Strache filing another lawsuit in Germany relating to the video's publication.