Zhou Yongkang is the most senior official targeted for graft in recent decades.
Rumours about an investigation began swirling as early as April last year, because of his close association with disgraced politician Bo Xilai.
Mr Bo became embroiled in a scandal over his wife’s murder of a British businessman and stood trial last week for corruption and abuse of power.
The English-language South China Morning Post, quoting sources “familiar with the leadership’s thinking”, said China’s current and retired leaders had decided to investigate Mr Zhou, who oversaw China’s massive state security apparatus, and served on the politburo standing committee, the apex of political power.
The decision was said to have been made early this month during a secretive meeting at a seaside resort town.
The report said the investigation would focus on oilfield and property deals that have benefited Mr Zhou and his family.
It has been several decades since a politburo standing committee member – incumbent or retired – was prosecuted. The reported investigation into Mr Zhou, 70, may illustrate the new leadership’s determination to exempt nobody in its fight against endemic corruption.
But in a political system in which graft is rampant, party-steered corruption inquiries into senior officials have often carried political overtones.
Prosecutions of high-level officials on graft charges are perceived as moves to ostracise those who have been defeated in factional struggles, without publicising details of infighting that depict party leaders in a state of disunity.
“I think the anti-corruption effort is just a political weapon used to take down whoever they want to take down,” said Zhang Lifan, a Beijing historian and elite politics expert. “Because when there is widespread institutional corruption, anti-graft efforts are not going to clean up the system. They are a means to get rid of political opponents.”
He said Mr Zhou’s fate appeared to be still unclear because of media reports that the former leader sent a wreath to the memorial of a party veteran earlier this week. “That’s a sign that he still has political presence,” Mr Zhang said.
Before his retirement last November, Mr Zhou was the ninth highest ranked Communist official, after rising through the party over 50 years.
He spent the early part of his career in the state-run oil sector, eventually becoming general manager of China National Petroleum Corp, the country’s biggest oil and gas company.
Later, he headed the ministry of land and resources and served as party chief of Sichuan province before being put in charge of public security in the early 2000s.
Mr Zhou wielded enormous influence over the police and paramilitary forces charged with maintaining internal stability at a time of growing unrest, and he was perceived to exert control over the oil sector through his associates.
But reports in overseas Chinese media early last year said he was being scrutinised for being an outspoken ally of Mr Bo.
Mr Zhou was widely believed to have been grooming Mr Bo as his successor and supporting his bid for a seat on the standing committee.
The latest report follows announcements by the Chinese authorities of investigations into four high-level oil sector executives. They include China National Petroleum Corp deputy general manager Wang Yongchun, said to be a close associate of Mr Zhou, who is being investigated on suspicion of “severe disciplinary violations”.