Oliver Schulz was arrested on Monday morning by Australian Federal Police officers in regional NSW and is due to appear in Queanbeyan Local Court on Tuesday.
The AFP and the Office of the Special Investigator (OSI) said in a joint statement the 41-year-old had been charged with one count of war crime - murder, which carries a penalty of life imprisonment.
It will be alleged the former special forces soldier murdered an Afghan man while deployed to the country with the Australian Defence Force.
The alleged incident was reported on in an ABC Four Corners episode in March 2020. After the broadcast, then-defence minister Linda Reynolds referred the matter to the AFP.
The OSI launched an investigation led by Supreme Court judge and former Army Reserve major general Paul Brereton.
The AFP and OSI said they were working to investigate allegations of criminal offences under Australian law related to breaches of the Laws of Armed Conflict by Australian Defence Force personnel in Afghanistan between 2005 and 2016.
The Office of the Special Investigator is an independent agency operating under the Attorney-General's portfolio.
It was created in 2020 to review any findings from the Afghanistan inquiry by the Inspector-General of the Australian Defence Force.
The inquiry was launched in 2016 to look into allegations relating to possible breaches of the law by members of the Special Operations Task Group in Afghanistan.
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