Michael McCartney was arrested in the southeastern city of Alicante after he appeared on a list published on Thursday of the 13 most wanted British fugitives in Spain.
A judge at the National Court in Madrid today "ordered him to be handed over to the United Kingdom, where he is wanted for 11 sexual crimes against children", a court source told AFP.
After Spanish police included his photograph on its most-wanted list of British fugitives released to the media, "apparently a neighbour recognised him and called the police," said the source, who asked not to be named.
McCartney was wanted by police in the English county of Hertfordshire, north of London, where he groomed his victims by buying them presents that their parents could not afford, according to the list.
A British court convicted him of the 11 charges in March this year and McCartney failed to turn up when summoned for sentencing the following month.
Appearing before a judge today, he agreed to be handed back to Britain and is due to be sent there in 10 days, the court source said.
British criminals have long seen the sunspots of southern and eastern Spain as a place to blend in among their many resident compatriots, but several have been arrested there this year.
On Thursday police arrested another British paedophile, Donald Cassidy, also 78, in the town of Estepona, near Marbella on the southern Costa del Sol.
He and McCartney were both arrested under European arrest warrants, which came into force in 2004 and have made it easier to catch cross-border fugitives in the European Union.