Argentine news reports quoted officials as saying Nebojsa Minic died yesterday in Mendoza in western Argentina, where he was being held.
Minic, aged 40, was reported suffering from both AIDS and lung cancer.
He had been arrested in Mendoza in May.
Serbia had been seeking Minic's extradition in connection with the killing of Kosovar civilians by a Serbian unit that he commanded in 1999.
(news agencies)