Argentina is to deport a former Nazi to Chile, where he is wanted on charges of sexually abusing children.
The decision was announced two days after Chile’s most wanted fugitive was arrested after eight years on the run.
Schaefer, 83, was a corporal in the German army during World War II before running a religious commune in Chile.
Colonia Dignidad, established in 1961, was cut off from the outside world and was alleged to have been a centre for torture and child abuse under Schaefer.
Schaefer was arrested on Thursday after a joint operation between Argentine and Chilean police.
He was taken to hospital on Friday complaining of high blood pressure, but health concerns did not affect the deportation order, passed under a new Argentinean law to avoid complex extradition procedures.
His expulsion was confirmed by Argentine federal judge Hector Echave and Chilean Interior Minister Jose Miguel Insulza.
He is also wanted in Germany on suspicion of the abuse and corruption of minors, and is under investigation in France.
A Chilean judge late last year convicted and sentenced him in absentia for sexually abusing 26 minors following allegations from victims.
Twenty-two other members of Colonia Dignidad were also found guilty.
He is expected to face a court hearing on Monday after returning to Chile by air force transport.
Chilean authorities have long held suspicions that Colonia Dignidad was used as a torture and interrogation centre during the military regime of Gen Augusto Pinochet.
In addition, Schaefer is wanted for questioning about the disappearance in 1985 of Boris Weisfeiler, an American Jewish mathematics professor of Russian origin.
For years, Colonia Dignidad was a mysterious community that was cut off from the outside world by barbed wire fences.
But in recent years former residents have testified of sexual abuse, the use of drugs and the separation of families.
German was the dominant language and Schaefer was the supreme ruler, they said.
Colonia Dignidad still exists – although it is now called Villa Baviera – and has about 280 residents.
Members have denied they participated in torture but said they had friendly relations with the military, with whom they shared anti-communist philosophies.