Father Denis "Chrysostom" Alexander was one of several monks accused of abusing boys at the former Fort Augustus Abbey boarding school in the Highlands.
The BBC has learned he has been remanded in custody in Sydney pending his extradition back to Scotland to face trial.
The Crown Office here said it would not comment on legal matters elsewhere.
Father Alexander has always denied the allegations.
In 2013, he was confronted by BBC Scotland in Sydney as part of a documentary which prompted a major police investigation.
Now, three and a half years after that programme, that investigation has taken a significant turn with the former Benedictine monk's arrest.
He will face a further hearing on Wednesday at the local court in New South Wales, where it will emerge if he will oppose the extradition or not. He will also be entitled to apply for bail.
One of Father Alexander's accusers, Hugh Kennedy, has previously spoken of his frustration at the length of time it has taken the Scottish authorities to request the extradition of the former monk who is now 80.
One other former Fort Augustus monk is due to face trial in Scotland soon for a series assaults, whilst a further seven cases remain under consideration by the Crown Office in Scotland.
Fr Alexander was returned by the Catholic Church to Australia in 1979, after allegations of abuse were made by another Fort Augustus Abbey pupil, who the BBC has also spoken to.
No report to the police was made, and no warnings were provided about his alleged offending behaviour, to the Church in Australia where Fr Alexander continued as a priest for a further 20 years or more.
He was stripped of his priestly faculties in 2013 after the BBC programme.
A former Catholic monk accused of child abuse at a Scottish school has been arrested in Australia.