Local police were not immediately available for comment but Suntory Holdings Ltd confirmed his arrest.
"It is true that George Smith, under contract to our rugby team, has been arrested," the company said in a statement.
"We issue a heartfelt apology to the victim, as well as other related people, as well as to the many people who have worried and been caused problems by this."
Flanker Smith made his professional debut in 2000 with the Brumbies and, since retiring from international rugby in 2010, has played in France, England and Japan.
He returned to Super Rugby in Australia last season for a stint with the Queensland Reds.