One of Colombia's most-wanted former paramilitary commanders with suspected links to the cocaine trade has been captured in neighbouring Venezuela, both nations said on Monday.

After years of acrimony, improved relations between Caracas and Bogota since Juan Manuel Santos came to power in Colombia in 2010 have led to the capture of a growing number of fugitive Colombians by Venezuela.

Hector German Buitrago - better known by his alias Martin Llanos and a former commander of one of Colombia's largest paramilitary groups - was arrested over the weekend along with his brother.

Martin Llanos played the leading role in one of the bloodiest wars in the Llanos Orientales and left hundreds, I'd say thousands, of victims, Santos said.

He made deals with FARC (leftist guerrillas) to divvy up the drug business, a business that in the last few years has extended to many countries, from Venezuela to Bolivia.

The 44-year-old was wanted for multiple counts of murder, terrorism, kidnapping and extortion.

Santos said Venezuela would hand over Llanos along with his brother, alias Horse, to Colombia on Thursday, a day before a meeting between the nations' defence chiefs.

Venezuela's Interior Minister, Tareck El Aissami, said the pair were caught in the central state of Anzoategui, but gave few details of the operation.

They are implicated in multiple homicides and a network of important narco-paramilitarism, he said.

Caracas broke off relations with Bogota in 2010 after Colombia's then president, Alvaro Uribe, accused Venezuela of harbouring FARC guerrillas, but ties immediately improved when Santos came to power later that year.

Increased security cooperation has led to the capture of senior Colombian FARC rebels and the leader of the criminal gang, the Paisas, in Venezuela over the last year.

Many former Colombian paramilitary commanders and troops have formed or joined criminal gangs heavily involved in the cocaine trade since a demobilisation process in the 2000s.

The new criminal gangs, known by the Spanish acronym Bacrim, include ex-members of traditional cartels that were smashed in the 1990s.

Colombia's major illegal armed groups are all involved in the drug trade and fight over transit routes and production sites in some regions while making deals in others.

Venezuela is a key route for drugs leaving Colombia for the United States and Europe, analysts say.

While security in Colombia has improved drastically since a 2002 U.S.-backed crackdown, experts and the government say new criminal gangs could become more of a threat than leftist guerrillas, which still stage sporadic attacks.

(Additional reporting by Marianna Parraga, Editing by Andrew Cawthorne and Todd Eastham)