Mr Cunha was accused of taking $5m in bribes from a company that won contracts with the state oil company, Petrobras.
He has vigorously rejected all the allegations.
Mr Cunha was for many years one of Brazil's most powerful politicians.
He led the impeachment process against President Dilma Rousseff, who was dismissed in August.
Mr Cunha, from the centre-right PMDB party, was expelled from the Brazilian Congress last month.
He was arrested in the capital, Brasilia, and has been transferred to the southern city of Curitiba, where federal judge Sergio Moro is leading the corruption probe.
Mr Moro said he had ordered the arrest because there was "a real possibility of [Mr Cunha] fleeing the country as he has resources hidden abroad".
The fact that he has dual Brazilian and Italian citizenship also increased the risk of him trying to evade justice, added Mr Moro.
Mr Cunha has been detained for an indeterminate period.
Petrobras is at the centre of a massive kickbacks scandal which cost the company $2bn (Â£1.5bn) and has led to the arrest of dozens of lawmakers and top businessmen.
At least three businessmen have said under interrogation that they paid bribes to Mr Cunha, which they deposited in his overseas accounts.
Along with his seat he has lost the partial immunity from prosecution that comes with being an elected representative.
In March 2015 Mr Cunha stated that he did not have "any type of account anywhere that is not declared on my income tax".
But authorities in Switzerland later gave information to a corruption inquiry in Brazil stating that Mr Cunha and his wife, former journalist Claudia Cruz, were beneficiaries of secret accounts worth about $5m (Â£3.7m).
During the proceedings against him in Congress, Mr Cunha threatened to reveal secrets and destroy the reputation of many of those who, in his opinion, had betrayed him.
Former President Dilma Rousseff said Mr Cunha had decided to accept a request to open her impeachment case in December last year after she refused to back him up in a corruption probe in Congress.
She was replaced by her vice-president, Michel Temer, who is also from the PMDB party.
Ms Rousseff accused Mr Temer of leading a political coup against her left-wing government.
The former speaker of the lower house of the Brazilian Congress, Eduardo Cunha, has been arrested in connection with a major corruption investigation.