The military said in a statement that Bilaal Razayna was arrested after crossing from the Gaza Strip into Israel.
It said his brother Mustafa Razayna is a head of internal security for Hamas, the Islamist movement that runs the Gaza Strip.
Gaza interior ministry spokesman Iyad al-Bozum said the man arrested was in his 20s but that he had been detained when approaching the border on the Gazan side of the fence.
He said his brother worked in the interior ministry, without providing further details, but added that the man had mental health problems and was not in contact with the Gaza security services.
It alleged he was part of Hamas's armed wing, the Ezzedine al-Qassam Brigades, for the last 10 years and "was closely associated with the tunnel network in the Gaza Strip."
"Razayna revealed sensitive information regarding Hamas activity, including that part of the tunnel system within the Gaza Strip was constructed under his home, which was also used as a weapon storage facility," the military statement said.
Over the years, Hamas has built a labyrinth of tunnels, including those crossing under the border with Israel, for use in any renewed conflict.
Tunnels were a key weapon for Hamas during the last conflict in 2014, with a number of surprise attacks inside Israeli territory.
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