Sanader, who was the country's prime minister from 2003 to 2009, was transferred by car from a detention unit in Salzburg where he had spent the past seven months.
He was transported in a police vehicle from Salzburg to the Slovenian border, where the Slovenian police took custody of him and escorted him under heavy protection to Remetinec prison near Zagreb.
Numerous reporters and photographers who have been camping outside the prison complex for the past few days were unable to take pictures of the ex-prime minister as he arrived in a van with tinted windows.
It was said earlier that Sanader would be placed in a single room in the women's ward, for security reasons. Former general Vladimir Zagorec is detained in the same ward, also for security reasons.
Sanader, who is also the former president of the ruling Croatian Democratic Union (HDZ) party, will be detained for one month while he awaits trial to prevent him from fleeing. The detention measure was also imposed because Sanader might try to tamper with witnesses in the Fimi Media case, a corruption trial in which he is is suspected of conspiring together with other suspects.
Mladen Barisic, a former head of customs, is suspected of abusing his office to siphon funds from government ministries and state-owned companies through the private company Fimi Media. Some 100 million Croatian kuna (€13.4 million) is believed to have been siphoned off in this manner and some of the money ended up in the HDZ's slush fund.
Sanader is expected to be interrogated by the country's anti-corruption agency and answer to charges in several other anti-corruption investigations.
Apart from the Fimi Media case, Sanader is suspected of conducting illegal operations between the Croatian Power Company and Dioki, a private petrochemical company. Another charge is related to a commission he allegedly received in the period 1994-1995 in his capacity as deputy minister of foreign affairs, for arranging a state loan from an Austrian bank.
In the meantime, Austria is reportedly also investigating Sanader on money laundering charges, although no indictment has been issued yet.
Sanader was arrested on 10 December 2010 and has been in the Salzburg detention unit ever since. Although he initially opposed his extradition to Croatia, claiming he would not get a fair trial in his homeland, the former PM recently changed his position and agreed to be extradited under a fast-track procedure.
His Zagreb-based attorney said the ex-PM did not want his case to block the closure of Croatia's EU entry talks.
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