The man, who was identified only by the initial 'M', was arrested Wednesday at a center for asylum seekers in the central city of Giessen, Lower Saxony state police said in a statement.
"According to initial investigations he was responsible for the seized ship's food supply as well as the bookkeeping, which formed the basis for distributing the ransom money to the pirates involved," police said, adding that the man had made a partial confession.
A court has ordered him held pending an indictment on charges of kidnapping and serious bodily harm, which can carry a prison sentence of five to 15 years.
Police said the man's fingerprints were found on the Marida Marguerite, a German-operated tanker carrying $10 million worth of fuel when it was hijacked in early May 2010.
The Somali pirates allegedly tortured the 22 crewmembers "in indescribable ways" for hours at a time before receiving several million dollars' ransom and releasing the ship on Dec. 27, 2010, police said.
German authorities said the man's arrest was the result of close international cooperation to crack down on piracy in the Gulf of Aden. A court in the United States last year ordered another man involved in the seizure of the Marida Marguerite to serve a dozen life sentences in prison.
Somali national Mohammad Saaili Shibin was also involved in the 2009 hijacking of a U.S. yacht during which four Americans were shot to death.