Former Ipswich Mayor Paul Pisasale has been charged with extortion and assault two weeks after quitting his post in his pyjamas amid a corruption investigation.
Crime and Corruption Commission officers arrested Mr Pisasale in Ipswich on Tuesday afternoon and took him to the Brisbane watch house for questioning.
The CCC later said the 65-year-old had been formally charged with one count of extortion and two other serious offences following an investigation.
He could front the Brisbane Magistrates Court as early as Wednesday morning.
One of Queensland's longest-serving council mayors, Mr Pisasale announced his resignation in a dressing robe and red pyjamas on June 6 following a CCC raid at his Ipswich council office.
He cited health concerns for his decision, delivering his exit speech in hospital where he was being treated for a recent flare up of multiple sclerosis, which he said he had suffered for 26 years.
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.
His friend, barrister Sam Di Carlo, said Mr Pisasale had agreed to a request from him to pass the money on to a Chinese client as part of a court settlement.
The Queensland Law Society said such a monetary exchange was "extremely unusual".
The mayor of Ipswich since 2004 and a councillor since 1991, Mr Pisasale was re-elected last year with a majority of 83 per cent.
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, councillors, property developers and Gold Coast-based federal MP Stuart Robert - as a witness in hearings probing alleged misconduct in last year's local government elections.
Mr Pisasale told the public hearing in Brisbane 76 separate donors contributed to his 2016 campaign but those gifts did not influence his leadership.
"People give to churches but they don't expect divine intervention," he said at the time.
Acting Ipswich mayor Paul Tully told reporters on Tuesday: "I am shocked by this, as are my colleagues. We had no warning at all that this could happen."
