He was said to have been arrested from his farm in Janzour, a suburb west of Tripoli, on Tuesday.
Libyan fighers opposed to Gaddafi shouted “Allahu Akbar” or “God is Great” as they arrested him, the report said.
Abdallah al-Hijazi, a close associate of Gaddafi, was also arrested in Tripoli, National Transitional Council sources said.
Gaddafi’s associate has been hit by numerous high-profile defections, arrests and killings since the uprising that has ended his 42-year rule of the country.
The NTC said on Monday it believed its fighters had killed Gaddafi’s son Khamis and his intelligence chief Abdullah al-Senussi in clashes. Gaddafi’s wife and three of his children fled to Algeria on Monday, Algeria’s government said.