One of Queensland's longest-serving mayors, former Ipswich councillor Paul Pisasale, will face court accused of extortion and assault.
Two weeks after Mr Pisasale quit his post dressed in his pyjamas, Crime and Corruption Commission officers arrested the 65-year-old in Ipswich on Tuesday afternoon.
He was being processed in the Brisbane watch house overnight and could face court as early as Wednesday morning.
The CCC said Mr Pisasale was formally charged with one count of extortion and two other assault-related offences following an investigation by their officers.
Acting Ipswich mayor Paul Tully said he and council colleagues were "shocked" by the arrest.
"We had no warning at all that this could happen," Mr Tully told reporters.
Mr Pisasale cited health concerns for his decision to resign after 13 years as mayor, delivering his exit speech in hospital on June 6 when he was being treated for a flare up of multiple sclerosis.
Later that day, reports broke that he was intercepted at Melbourne airport on May 13 by Australian Federal Police carrying $50,000 cash in a bag.
Mr Pisasale's friend, barrister Sam Di Carlo, said the then-mayor had agreed to a request from him to pass the money on to a Chinese client as part of a court settlement.
Tuesday's arrest comes six days after independent Queensland MP Rob Pyne tabled a four-page document in state parliament attacking Mr Pisasale.
The document raised questions about his alleged links with developers and possible conflicts of interest involving councillors and staff.
The CCC had in April also called Mr Pisasale - as well as three other southeast Queensland mayors and several councillors and property developers - as a witness in hearings probing alleged misconduct in last year's local government elections.