The pressure group Republic contacted Scotland Yard last September and reported both the future king and Michael Fawcett, Charles’s former royal valet, on suspicion of breaching the Honours (Prevention of Abuses) Act 1925.
At the time Clarence House said the prince had “no knowledge” of the alleged cash-for-honours scandal.
Mr Fawcett, who has since resigned as chief executive of Charles’s charitable body The Prince’s Foundation, was accused of promising to help secure a knighthood and British citizenship for a Saudi billionaire donor.
Scotland Yard said: “The Metropolitan Police Service has launched an investigation into allegations of offences under the Honours (Prevention of Abuses) Act 1925.
“The decision follows an assessment of a September 2021 letter. This related to media reporting alleging offers of help were made to secure honours and citizenship for a Saudi national.
“The Special Enquiry Team has conducted the assessment process which has included contacting those believed to hold relevant information.
“Officers liaised with The Prince’s Foundation about the findings of an independent investigation into fundraising practices. The foundation provided a number of relevant documents.
“These documents were reviewed alongside existing information. The assessment determined an investigation will commence.
“There have been no arrests or interviews under caution.”
Charles is president of the trustee-run foundation but not involved with its governance.
Clarence House reiterated its previous statement: “The Prince of Wales had no knowledge of the alleged offer of honours or British citizenship on the basis of donation to his charities.”