Muhyiddin, who led Malaysia from March 2020 until August 2021, will be the country's second leader after ex-Prime Minister Najib Razak to be indicted after leaving office.
Malaysia's former Prime Minister Muhyiddin Yassin has been arrested and will be brought to court to face corruption charges, the anti-graft agency said.
The anti-graft agency said Muhyiddin, 75, will face charges on Friday related to alleged abuse and money laundering linked to government projects awarded under his 17-month rule.
It said Muhyiddin was detained shortly after he arrived at the agency for the second time in three weeks to answer questions about an economic stimulus program for ethnic Malay contractors during the Covid-19 pandemic.
Prime Minister Anwar Ibrahim, who took power after November's general elections, had ordered a review of government projects approved by past administrations that allegedly did not follow the rules.
He has denied the case against Muhyiddin was politically motivated, telling local media the investigation was independently carried out by the anti-graft agency.
“If you said all cases are politically motivated, then how are we going to arrest people for big corruption cases?” Anwar was cited as saying by the Malay Mail, an online news portal.
Two senior leaders from Muhyiddin's Bersatu party were also recently charged with graft. The anti-graft agency froze Bersatu's bank accounts amid investigations into alleged illegal proceedings.
READ MORE: Malaysia's top court upholds former PM Najib's jail sentence in 1MDB case
Muhyiddin denies the accusations
Muhyiddin, who leads a strong opposition, has denied any wrongdoing and accused Anwar's government of trying to crush the opposition ahead of state elections.
Earlier Thursday, a large crowd of supporters gathered outside the anti-graft agency building, chanting “Fight! Fight!” amid speculation that Muhyiddin would be arrested and charged.
Bersatu leaders accused Anwar’s government of political persecution to tarnish the opposition.
Anwar and Muhyiddin battled for the premiership after November general elections produced a hung parliament.
The country’s king later appointed Anwar as prime minister after he formed a unity government with several smaller parties. Anwar's strength will be put to test in elections in six states in the coming months.
READ MORE: Who is Malaysia's king and why is he picking the prime minister?