The National Court in Madrid said Inocente Orlando Montano Morales, 76, arrived in Madrid on Wednesday from the US and was placed in prison. He is to be brought before the court on Thursday.
Montano faces charges of terrorist murder in the attack on the Jesuit priests - five of whom were Spaniards - and two female employees.
US court documents said Montano was part of a group of military officers accused of conspiring to kill the priests, who were helping organise peace talks during El Salvador's 1980-1992 civil war.
The extradition was welcomed by lawyers for a legal advocacy organisation, The Guernica Group, and the Spanish Association for Human Rights, who in 2008 filed a criminal complaint before the National Court on behalf of the victims.
"Montano's arrival to Spain brings hope not only to the families and the Jesuit community but to all victims of El Salvador who have been waiting for justice since the end of the war," said Almudena Bernabeu, a lawyer with The Guernica Group.
Montano served as El Salvador's vice minister for public security in the 1980s during the central American country's civil war.
He had been held most recently in a South Carolina facility by US federal authorities.
The final legal hurdle for the extradition was crossed earlier this month when the US Supreme Court denied his request for a stay of extradition.
Montano denied involvement in the killings but a federal magistrate judge in North Carolina ruled in 2016 that evidence showed he took part in the plot.
Spain also issued warrants in an effort to try other former officers who are currently living in El Salvador but the central American country declined to allow their extradition.
While two officers served short sentences in El Salvador, Montano and other high-level officials were never tried by Salvadoran authorities in the priests' killings.
A Jesuit group recently began efforts to have Salvadoran authorities re-examine the killings of the priests, their housekeeper and her daughter.
Montano travelled to the US in the early 2000s. He was arrested in 2011 and sentenced to nearly two years for immigration fraud and perjury.
