Ranjith Gunasekara said the man had been flying for the company for 10 months before an internal probe found he was only qualified as a co-pilot, and not as a captain of a wide-bodied airliner.
"We are going to take over all the documents from personal files for our investigations," Gunasekara said. "The German national is now being held by the airport police."
There was no immediate comment from Sri Lankan airline, which until April this year was fully-managed by Emirates of Dubai.
Sri Lankan airline sources said the German national was discovered when a junior pilot, who had been sent for routine training on a bigger Airbus A-340, noticed that the "captain" was uncomfortable with the controls.
However, he had still captained Sri Lankan flights to European destinations including London, Frankfurt and Paris, as well as Dubai, the sources said.