UMNO president Ahmad Zahid Hamidi has been arrested by the Malaysian Anti-Corruption Commission (MACC).
The MACC confirmed that this happened at 3.15pm on Thursday, The Star Online news website reported.
In a Facebook post, Umno Supreme Council member Lokman Noor Adam said Dr Ahmad Zahid announced that he had been arrested at the MACC headquarters in Putrajaya.
"Datuk Seri Zahid informed me that he was arrested upon his arrival at MACC headquarters. All are invited to gather here at 9pm," he said.
MACC is investigating claims that RM800,000 (S$268,607 ) belonging to Yayasan Akal Budi, his family's charity foundation, had been used to pay off his credit card bills.
Graft investigators have had four questioning sessions with the Umno president, the first on July 3, followed by three interviews on Oct 10, 11 and 12. Each session lasted more than eight hours.
MACC officials had sent a notice to the Umno president on Wednesday, requesting him to be present at the anti-graft authority's headquarters in Putrajaya at 3pm the following day.
It also said that he was expected to be charged on Friday.
Following his arrest, he rejected a suggestion by his lawyer to apply for bail, New Straits Times reported.
Instead, he indicated that he was willing to spend the night in the MACC lockup ahead of being brought to the Kuala Lumpur Sessions Court to be charged, said his wife Hamidah Khamis.
"The lawyer had offered to arrange for him (Zahid) to be bailed, but he declined. So he will stay here until tomorrow," she said.
Asked on how she was coping with her husband's arrest, she said this wasn't the first time he had been detained.
"I'm all right. Previously, he was detained for 10 days when he was Umno Youth chief (under the Internal Security Act)."
The New Straits Times reported that MACC had confirmed the arrest of the former deputy prime minister in conjunction with an investigation into abuse of power, criminal breach of trust as well as money-laundering.
It said the arrest was related to funds belonging to a foundation.
MACC said the arrest was carried out after obtaining clearance from the Attorney-General's Chambers to have him charged.