Swiss prosecutors have opened a criminal investigation into Sepp Blatter, the head of football's world governing body Fifa.
The attorney general's office said he was suspected of criminal mismanagement or misappropriation over a TV rights deal and of a "disloyal payment" to European football chief Michel Platini.
Mr Blatter was being questioned, and his office was searched, it added.
Fifa said it was co-operating with the investigation.
Mr Blatter, 79, has run Fifa since 1998 and has always denied any wrongdoing.
'Disloyal payment'
The Swiss attorney general's office said the investigation surrounds a TV rights deal Mr Blatter signed with former Caribbean football chief Jack Warner in 2005.
"Swiss criminal proceedings against the president of Fifa, Mr Joseph Blatter, have been opened... on suspicion of criminal mismanagement... and - alternatively - misappropriation," it said.
Mr Blatter is also suspected of making a "disloyal payment" of two million Swiss francs ($2m; £1.3m) in 2011 to Michel Platini, the head of the European football body Uefa, the statement said.
It said the payment was "at the expense of Fifa, which was allegedly made for work performed between January 1999 and June 2002".
Mr Blatter is due to step down in February and Mr Platini is widely expected to replace him.
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Analysis by BBC sports editor Dan Roan
Ever since May, when the arrest of senior Fifa officials in dawn raids in Zurich plunged world football's governing body into crisis, the sport has wondered whether the scandal would lead directly to President Sepp Blatter.
Today - finally - it did. On the one hand, perhaps it should come as no surprise.
After all, Mr Blatter has been at the helm of Fifa for 17 years. He's become symbolic of the many corruption allegations that have blighted the body and some thought it a matter of time until investigations by the FBI and Swiss criminal authorities would implicate him.
In fact, such was the perceived threat facing Mr Blatter that his lawyers advised him not to travel abroad.
However, this is still a stunning development, with criminal proceedings opened against the man who still runs world football.
Although Mr Blatter announced he was stepping down back in June, he decided to hang on as president until February in a bid to influence the choice of his successor and reforms. That now seems highly unlikely, with calls for him to resign immediately bound to intensify.
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In May, Swiss authorities arrested seven Fifa officials in Zurich at the request of the US. They face extradition.
The US then unveiled indictments against seven other people in their corruption case, nine of whom are high-ranking officials.
Among them was Jack Warner, president of the Caribbean football association Concacaf and one of the most powerful men in world football. He is currently in Trinidad awaiting extradition to the US on charges of corruption.
The Swiss opened their own investigation into Fifa hours after the initial arrests.
Fifa owns the TV rights to the World Cup and sells them to regional federations which then sell them on to broadcasters.
Mr Blatter's lawyer, Richard Cullen, said he was confident the inquiry would clear Mr Blatter of any wrongdoing regarding the contract with Jack Warner.
"We are confident that when the Swiss authorities have a chance to review the documents and the evidence, they will see that the contract was properly prepared and negotiated by the appropriate staff members of Fifa who were routinely responsible for such contracts, and certainly no mismanagement occurred," he said.
