The knowledge of the variation of arc current is helpful in improving the breaking performance of a vacuum circuit breaker. As a novel non-intrusive method, arc magnetic performance testing technology has attracted attention. In view of the widely used regularization method of the standard form in arc current reconstructions cannot fully overcome the ill-posed nature of the Biot-Savart equation, the regularization approach based on generalized singular value decomposition (GSVD) is proposed to improve the situation. Moreover, a discrete 3-D arc model with the help of the finite element technique incorporating the current divergence-free and boundary conditions is introduced to improve the authenticity of the model. The performance of the truncated generalized singular value decomposition (TGSVD) and general-form Tikhonov regularization with derivative operators L 1 and L 2 are studied in numerical tests. In addition, the effectiveness of generalized cross validation criterion, quasi optimality criterion and normalized cumulative periodic graph method in selecting regularization parameters are compared. The methodology can help improve arc control and guide the design of vacuum circuit breakers with improved performance parameters.