The military said Rasidin Mohammad, with aliases Rasam, Rasa and Rasim, was captured in Zamboanga City last Friday.
Mohammad had been placed under "tactical interrogation" before he was turned over to the police for proper filing of charges, the military said.
Mohammad was among the Abu Sayyaf bandits who allegedly took part in the kidnapping of Americans Guillermo Sobero and missionary couple Martin and Gracia Burnham along with 17 Filipino tourists on May 27, 2001.
Sobero was beheaded the following month as an "Independence Day gift" to the government.
The bandits also separately abducted 25 farmers in Basilan to help them carry weapons and equipment but later beheaded 12 of them.
One of the Filipino hostages, nurse Edibora Yap, was killed more than a year later during a military rescue operation in June 2002 in which Martin Burnham also died. His wife, Gracia, was wounded before she was rescued by the military.
The military said Mohammad was among the Abu Sayyaf gunmen who kidnapped the 25 farmers from the Golden Harvest farm in Basilan. The suspect also took part in the siege of Lamitan town in Basilan in June 2001 where the bandits took Yap as a hostage.
The Abu Sayyaf, founded in the early 1990s by Afghan-trained Islamic scholar Abdurajak Janjalani, is a small but brutal group of militants that analysts say is fast becoming a major threat in the region.
Last year, the bandit group was also blamed for the firebombing of SuperFerry 14 on Manila Bay, killing over 100 people in what authorities described as the worst terrorist attack in recent years.
The Abu Sayyaf also owned up to the Valentines Day bombings that rocked the cities of Davao and General Santos in Mindanao and Makati City in Metro Manila that left 13 people dead and scores wounded.
Two suspects have been arrested, almost a week after the bombings.
Authorities said the Jemaah Islamiyah, the Southeast Asian group of Osama bin Ladens al-Qaeda terror network, had trained Abu Sayyaf extremists to carry out the bombings.
A suspected JI militant was captured by the military last Saturday in Maguindanao.
The arrest came after authorities nabbed the alleged supplier of explosives used in the Valentines Day attacks. With AFP