Abdullah Sabawi was extradited on Friday, the Iraqi security source told AFP on condition of anonymity, describing him as the "son of a nephew" of the executed dictator.
"He is accused of having been a member of IS and having participated in the Speicher massacre" of 2014, in which up to 1,700 air force cadets were executed by the jihadist group, the source added.
A Lebanese judicial source said Sabawi, born in 1994, "was detained on June 11" following an Interpol notice calling for his arrest over his alleged involvement in the massacre.
"Iraq requested his extradition," the Lebanese source added.
Sabawi's family has denied the accusations, telling AFP he had been in Yemen at the time of the killings.
The Camp Speicher massacre was considered one of IS's worst crimes after it took over large parts of Iraq in 2014.
Video footage released by IS showed an assembly-line style massacre in which gunmen herded their victims towards the banks of the Tigris, shot them in the back of the head and pushed them into the river one after the other.
Dozens have been sentenced to death by Iraqi courts over their involvement in the killings and many of them have already been executed.
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