Ishaq was taken into custody at Lahore airport on his return from Saudi Arabia, officials said.
"We were ordered by our superiors to take a large contingent of police to the airport with an armoured vehicle to arrest Malik Ishaq on his arrival from Saudi Arabia," a senior officer of Punjab Police said.
"We arrested Ishaq in connection with a case registered against him at Model Town police station for making a speech some time ago that spread sectarian hatred. Ishaq has been taken to an undisclosed location for interrogation," said the officer, who spoke on condition of anonymity.
Security sources said that Ishaq had violated his bail by travelling to Saudi Arabia about a week before the Eid-ul-Fitr festival.
In January last year, a provincial review board comprising judges of the Lahore High Court turned down Punjab Police's request for Ishaq's continued detention and ordered his release.
After being imprisoned for 14 years, Ishaq was released from Lahore's Kot Lakhpat Jail in July last year when he was granted bail by the Supreme Court.
While he was still in prison, he was accused of masterminding the 2009 attack on the Sri Lankan cricket team in Lahore that killed eight persons.
After Ishaq's release, Pakistan saw a surge in the killing of Shias across the country and Shia organizations blamed him for the violence.
After the recent killings of Shias, pressure has increased on Punjab government to act against Ishaq, who continued making speeches inciting violence against Shias.
Ishaq was charged in 44 cases but convicted in only two, for which he received prison terms totalling six-and-half years. He was acquitted in 34 cases and granted bail in seven others while one case was discharged.
He has been accused of involvement in the killing of at least 70 people, a majority of them Shias.
The LeJ chief had been in jail since 1997, when he was arrested for allegedly killing 12 members of Fida Hussain Ghalvi's family. He was accused of killing 58 others in separate incidents of sectarian violence.
Ishaq, one of the founders of the LeJ, was granted bail by the apex court after the prosecution failed to prove his involvement in the attack on the Sri Lankan cricket team.
However, reports by intelligence and law enforcement agencies have stated that Ishaq is still engaged in highly objectionable activities that may trigger sectarian violence in Punjab.
Lahore: Pakistani police on Thursday arrested Malik Ishaq, chief of the banned Lashkar-e-Jhangvi, as he returned to the country after performing the Umra pilgrimage in Saudi Arabia by violating his bail, officials said.
First Published: Thursday, August 30, 2012, 23:08