Shivhare was arrested by a joint team of the STF and the Central Bureau of Investigation after his whereabouts were tracked to Kalyanpur Awas Vikas area in the city, the Special Task Force's Additional Superintendent of Police Arvind Kumar told the media.
"The CBI will move an application in a local court for his transit remand," Kumar said.
STF sources said that Shivhare, whose wife Anshu Shivhare is a former Mahoba Zila Panchayat chairperson, was evading the CBI since 2012.
The Madhya Pradesh government had declared a reward of Rs.5,000 for his arrest.
The ASP said: "Shivhare has admitted to his links to the Vyapam scam during questioning. He said he had enabled many candidates to clear the exams conducted by Vyapam. He is being questioned regarding his accomplices."
The scam in the Madhya Pradesh Professional Examination Board (MPPEB), better known as Vyapam (Vyavsayik Pariksha Mandal), related to admissions in medical colleges and recruitment tests conducted for various posts in Madhya Pradesh.
At least 48 people linked to the Vyapam scam have died, some mysteriously.
The Supreme Court directed the CBI on July 9 last year to investigate not only the scam but also the deaths related to it.
The STF has filed 55 cases in the scam. Though 2,100 accused have been arrested, another 491 accused are still on the run.