Leka Zogu, known by Albanian monarchists as King Leka I, was arrested on Friday along with three employees.
Police said an arsenal of weapons, including more than 70 firearms, was removed from the 59-year-old's home in Fourways, a northern suburb. It contained AK47s, .22 sniper rifles, grenade launchers, a rocket launcher, more than 80 grenades and anti-personnel mines.
A Johannesburg police spokesman said a section of the house, where Mr Zogu has lived since being granted diplomatic privileges in South Africa in 1991, was "like an armoury". He refused to speculate as to why the pretender-king was allegedly storing so much weaponry, including 14,000 rounds of ammunition.
Mr Zogu and the three men arrested with him will appear at Randburg magistrates' court today on charges related to being in possessions of firearms, explosives, automatic firearms and ammunition without licences or permits.
A South African foreign affairs spokesman said that after the fall of the Berlin Wall, Mr Zogu was granted certain diplomatic privileges, protecting his archives and possessions but he did not have full diplomatic immunity. "At the time, there was an opinion that the Albanian monarchy might return and the previous [apartheid] government wished to establish closer links," with the country, the spokesman said.
He added that South Africa, after consultations with the Albanian government, terminated Mr Zogu's privileges last Thursday. "This was something the present government inherited from the previous one and is in conflict with our present relationship with the government of Albania."
Mr Zogu, the 6ft 8in son of King Zog - who was exiled from Albania by Benito Mussolini on April Fool's day 1939 - grew up in Egypt and is believed to have lived in England, France, Spain and South Africa.
According to unconfirmed reports, his father, who died in 1961, helped the apartheid government procure arms and other equipment banned under United Nations embargoes.
Mr Zogu boasts that in 1993 he entered his fatherland on a passport issued by the "Kingdom of Albania". He travelled there again in 1997 to campaign, wearing military fatigues, for the return of the monarchy. But he lost a referendum on the issue and has lived ever since in Fourways with his Australian wife, known as Queen Susan.
Mr Zogu, whose profession is listed as "commodity broker" wants an "ethnic Albania" and the restoration of his father's 1928 constitution. He has promised to return to the country once the 2 million Albanians in Kosovo gain autonomy within Yugoslavia.
Last June in Tirana, Mr Zogu was found guilty in absentia of staging an armed rebellion in which one man died. The killing happened at a demonstration after the July 1997 referendum.