The ex-officer was still on active duty with the German military when the counter-intelligence investigation began, said a ministry spokesman.
Both are believed to have used their contacts in the German Armed Forces to supply sensitive information to Ilona W, the spokesman added.
Whether they knew the information was being passed along to Russian intelligence is part of the ongoing investigation, he said.
German news magazine Der Spiegel said Ilona W is a 56-year-old businesswoman who was active on the board of a prominent Berlin-based organisation that promotes international understanding.
The magazine, citing unnamed sources, also reported that the woman’s embassy contact is a colonel in Russia’s GRU military intelligence service who operated undercover as the embassy’s military attache.
Asked by AFP, the Russian Embassy in Berlin said it would not comment on the allegations.
Drone technology
Der Spiegel reported that the former civil servant was the director of the German military’s technical service until 2018.
Among other tasks, that service was responsible for evaluating drone technology for the procurement office.
The magazine reported that he had since worked as a consultant, boasting of keeping in close and regular contact with the military.
Prosecutors said Ilona W also helped her Russian handler use a false identity to attend political events in Berlin and establish useful contacts.
The homes of Ilona W and the two others were raided by police yesterday.
The arrest comes as Germany and other governments across Europe are on high alert over suspected Russian espionage, drone surveillance and sabotage activities such as cyberattacks and disinformation campaigns.
Moscow has repeatedly denied those allegations, instead accusing the West of trying to undermine and destroy Russia.
Efforts by German authorities to root out suspected Russian spies have increased since Russia’s full-scale invasion of Ukraine in February 2022.
“The threat posed by Russian espionage is real,” German Justice Minister Stefanie Hubig said.
Given those threats, Hubig said it was necessary “to strengthen our democracy’s defences against foreign espionage and hybrid warfare”.
Germany is a major supplier of military aid to Ukraine and is among the European Nato powers that are sharply increasing defence spending to deter Russia.
The country is also a key logistical hub for Nato forces in Europe.
German authorities have repeatedly warned about agents supposedly recruited online to carry out tasks such as taking photos of key industrial and military sites.
German police have also arrested two men - a Russian and a German citizen - for allegedly funnelling cash and equipment to pro-Russian separatist militias fighting in eastern Ukraine.
-Agence France-Presse