Ex-leader Rupiah Banda was arrested on Monday over a week after he was stripped of presidential immunity, an investigator said.
Banda, who has been accused of misappropriating more than $11 million during his three years in office, was arrested and then later released on a bond, said Namukolo Kasumpa, a spokeswoman for the government’s investigation team.
He will appear in court again on Tuesday, she said.
The country’s authorities are accusing him of procuring oil which did not benefit the country.
He was said to have imported crude oil from Nigeria, without actual deliveries, despite the fact that the funds were deposited into the bank account of his son.
Banda, who led Africa’s top copper producer from 2008 to 2011, has maintained his innocence, saying his ordeal is politically-motivated.
The former president was questioned for nearly three hours after his arrest, his lawyer Sakwiba Sikota said, adding that Banda had done nothing wrong.
Banda later appeared before supporters telling them to remain calm and that he would win his case in court.
Banda was defeated in 2011 by rival Michael Sata, whose government has launched several high-profile corruption probes into deals struck by the former administration.
Earlier this month, parliament lifted Banda’s presidential immunity, clearing the way for him to be prosecuted for several corruption and abuse of office charges.
Born 13 February 1937, Banda was President of Zambia from 2008 to 2011.
During the Presidency of Kenneth Kaunda, Banda held important diplomatic posts and was active in politics as a member of the United National Independence Party, UNIP. Years later, he was appointed as Vice-President by President Levy Mwanawasa in October 2006, following the latter’s re-election.
He took over Mwanawasa’s presidential responsibilities after Mwanawasa suffered a stroke in June 2008, and following Mwanawasa’s death in August 2008, he became acting President.
As the candidate of the governing Movement for Multiparty Democracy, MMD, he narrowly won the October 2008 presidential election, according to official results.
Opposition leader Michael Sata defeated Banda in the September 2011 presidential election, and Sata accordingly succeeded Banda as President on 23 September 2011.