"We can confirm that Terzic has surrendered himself to the authorities," Interior Ministry (MUP) spokeswoman Suzana Vasiljevic said.
The MUP issued a warrant for Terzic's arrest in March 2008 on suspicion that he has made illegal profits on player transfers from Serbian first division club OFK Belgrade, where he was the director 1997-2005.
Terzic has been accused by state prosecutors of skimming money off the transfers of Vanja Grubac to Hamburg, Branislav Ivanovic to Lokomotiv Moscow, Stevan Stosic to Spanish club Malaga and Srdjan Stanic to Spartak Moscow.
Serbia defender Ivanovic joined English champions Chelsea from Lokomotiv in 2008.
Terzic was named the FSS chief in 2006 and resigned shortly after the charges were pressed against him in March 2008, having left Serbia in January that year with the explanation that he had gone abroad for a professional development course.
He submitted his resignation in writing from an undisclosed location and his whereabouts while he was at large remained officially unknown amid widespread rumours that he was hiding in neighbouring Montenegro.
Terzic's lawyer Vladan Batic said he hoped his client would be able to defend himself on bail after "making himself available to the authorities."
"Zvezdan Terzic believes in the Serbian justice system and his decision to make himself available to the authorities shows that in no uncertain terms," Batic said in a statement.
"As his lawyer, I will ask that bail be granted and custody denied because Tezric's act shows there is no flight risk."
Serbian football has been plagued with corruption in the past two decades, following the former Yugoslavia's violent break-up in the 1990s.
Dragan Dzajic, a former FSS vice-president, was arrested in February 2008 on charges of fraud and abuse of power during his time as Red Star Belgrade president.
Former Yugoslavia winger Dzajic was released in July 2008 but the investigation into his case remains open.
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