The 21-year-old sailor was arrested after he was transferred to police from the U.S. Navy base in Yokosuka, about 30 miles southwest of Tokyo, a police official said on condition of anonymity, citing police branch policy.
The U.S. military had agreed to hand over the sailor, who police said admitted during questioning that he killed 56-year-old Yoshie Sato. Sato was found beaten and unconscious in Yokosuka on Tuesday, and later died of internal bleeding.
William Oliver Reese, 21, beat and robbed Yoshie Sato, 56, of about $129 on a street in Yokosuka on Jan. 3, according to a Kanagawa Prefectural Police official who spoke on condition of anonymity citing police protocol. She died of her injuries.
The U.S. Navy Forces Japan said in a statement that it will continue cooperating with Japanese authorities in the case.
"The U.S. Navy's responsibility to see this matter through to its rightful conclusion does not end here, and we will continue to provide our complete support and cooperation with Japanese authorities," Rear Adm. James Kelly, the commander of U.S. naval forces in Japan, said in the statement.
The sailor was based on the aircraft carrier USS Kitty Hawk and has been in Japan since May 2004. He has been in the Navy for about two years, and Japan was his first assignment, according to the Navy.
Police plan to transfer the suspect to the Yokohama District Public Prosecutors Office on Monday, according to the Kanagawa police official.
The case risks further inflaming local opposition to plans to build an American military airstrip in the southern island of Okinawa, and base a U.S. nuclear-powered warship at Yokosuka for the first time.
Reflecting the sensitivity of the case, the U.S. Embassy issued a statement Friday expressing regret for the crime.
"The U.S. military and the American people are deeply shocked and saddened by this event," U.S. Ambassador Thomas Schieffer said.
In 1995, an uproar over the rape of a 12-year-old girl by three U.S. servicemen on Japan's southern island of Okinawa triggered massive protests and led to the relocation of an air base to a less densely populated part of the island.
The rape case also resulted in an agreement with the U.S. military that it would hand over American suspects in serious crimes to Japanese authorities for pre-indictment investigation.
About 50,000 U.S. troops are stationed in Japan under a joint security pact, but Tokyo and Washington agreed in October to move 7,000 Marines from Okinawa to the U.S. territory of Guam, and shift some of the remaining troops within Japan.