Lu's arrest is a "severe blow" to a "significant international organised crime network," said Jong-Gil Kim, head of the Seoul police's international crime investigation unit.
Lu was wanted for attempted murder and for being one of the main leaders of a major crime syndicate involved in extortion, drug running, money laundering and illegally running casinos in China, Interpol said.
The arrest came after months of cooperation and surveillance between the Interpol offices in Beijing and Seoul, a statement said.
South Korean officials conducted surveillance on Lu's luxury hideout in Seoul's upmarket Gangnam district from where he was suspected of "directing organised crime operations in China," according to Interpol.
He was handed over to Chinese authorities in Seoul on September 16, said the organisation, which is based in Lyon, France.