Samuel Kunz, 88, allegedly served Hitler's Third Reich in the Belzec camp in occupied Poland during World War Two.
He is number three on a most wanted list of ex Nazis.
Kunz was charged after prosecutors said he served as a guard from January 1942 to July 1943 where it is claimed he helped exterminate Jews.
He is also accused of the shooting a total of ten Jews in two other incidents.
Top Nazi hunter Efraim Zuroff said Kunz participated in the so-called Operation Reinhard to eliminate Polish Jews.
Mr Zuroff, from the Simon Wiesenthal Center which fights anti-Semitism, said: "The indictment of Samuel Kunz is a very positive development.
"It reflects recent changes in the German prosecution policy, which have significantly enlarged the number of suspects who will be brought to justice."
German officials are now considering whether and when to hold a trial.
Kunz was found living near the western German city of Bonn after his name came up in investigations connected to the trial of another suspected Nazi John Demjanjuk.
Demjanjuk, 90, is currently on trial in Munich on charges of being an accessory to the murder of 28,060 Jews as a guard at Poland's Sobibor death camp.
He denies he was ever a camp guard.
Prosecutors allege both Kunz and Ukrainian-born Demjanjuk, a retired Ohio car worker who was deported to Germany from
the US last year, trained as guards at the Trawniki SS camp.
Kunz, whose family is German, was born in August 1921 on Russia's Volga River and joined the Red Army, claims Klaus Hillenbrand, a German expert who has written several books on the Nazi period.
But during World War Two he was captured by the Germans and given the choice of either staying at a prisoner of war camp or cooperating with the Nazis, said Hillenbrand.
Adolf Storms, a 90-year-old former SS sergeant who was number four on the Simon Wiesenthal Center's list of most-wanted Nazi war crimes suspects, died earlier this month before he could be brought to trial
