"In the afternoon he was informed that he had contracted the A(H1N1) influenza virus," said Rodrigo Arias, the president's brother and chief of staff.
The 67-year-old president, who was under medical care, must remain isolated in his residence for at least seven days, but will not delegate power during his absence, his brother said.
President Arias, a Nobel laureate who suffers from chronic asthma, was said to have had flu-like symptoms for some days, prompting medical tests.
The veteran leader has recently been spearheading international efforts to resolve the crisis in Honduras, meeting rival factions who have clashed since President Manuel Zelaya was ousted in a military-backed coup in June.
Mayi Antillon, a spokeswoman for the Costa Rican government, said Arias would continue to work from home.
"He does not want to deceive the population," she said explaining the decision to make his illness public.
Twenty-seven people have died as a result of the virus in Costa Rica, and about 800 people have been infected.
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