Najib Razak has been charged with corruption, a dramatic fall from grace for the former Malaysian prime minister two months after he lost office.
He faces three counts of criminal breach of trust and one count of abuse of power.
Mr Najib has long been accused of pocketing $700m (£517m) from the state development fund 1MDB, which he set up. He denies wrongdoing.
A new investigation began after his shock election loss in May.
Mr Najib was arrested by anti-corruption authorities on Tuesday and spent the night in detention.
In a video posted on Twitter a day earlier, he appealed to the public not to believe the reports, saying that not all of the accusations were true. “I have not had a chance to defend myself,” he said.
The charges against him carry a maximum of 20 years imprisonment.
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1MDB, set up by Mr Najib in 2009, was meant to turn the capital, Kuala Lumpur, into a financial hub and boost the economy through strategic investments.
But it started to attract negative attention in early 2015 after it missed payments for some of the $11bn it owed to banks and bondholders.
Then the Wall Street Journal (WSJ) reported it had seen a paper trail that allegedly traced close to $700m from the fund to Mr Najib’s personal bank accounts.
Billions of dollars are still unaccounted for.
Mr Najib has always denied the corruption charges and had been cleared by Malaysian authorities while in power, but he is being investigated by several other countries.
The allegations played a central role in his defeat to former ally, 93-year-old Mahathir Mohamad, in May.
Mr Mahathir pledged to re-open the investigation and Mr Najib was banned from leaving Malaysia.
Raids in recent weeks have been carried out across properties linked to Mr Najib and his wife.
Police say they recovered $273m in luxury goods and cash from a raid in June, calling the seizure of valuables the biggest in Malaysian history.
Jewellery accounted for the biggest portion of the seizure, with the most expensive item being a $1.6m diamond and gold necklace.
Mr Najib has always insisted such goods were gifts or legitimately bought.
Malaysia’s ex-PM Najib charged with corruption over 1MDB