Authorities allege that the illegal land deals cost the Karnataka state coffers 4.65 billion rupees ($950 million) while Yeddyurappa and members of his family are said to have personally gained 1.89 billion rupees. Judge N.K. Sudhindra Rao ordered the arrest of Yeddyurappa earlier on Saturday and said bail could not be granted in the case due to its "gravity".
Lawyers for the former Hindu nationalist Bharatiya Janata Party (BJP) chief minister, who is among 14 accused in the case, had asked the judge not to order the arrest of Yeddyurappa, saying he was suffering from ill-health. The case involving the sale of land in and around Bangalore stems from complaints in January by two lawyers.
The politician was forced to step down as chief minister in July by the party's national leadership after being accused by the state ombudsman of corruption. Aside from the land scam, the former chief minister also faces accusations over an alleged $3.6-billion iron-ore mining fraud. No formal charges have been lodged yet in either case.
Yeddyurappa, who has been ordered to remain in custody until October 22, has denied any corrupt dealings. The former BJP chief minister was a political star, credited with installing the Hindu nationalists' first state government in southern India.
The graft accusations have come as an embarrassment to the BJP, which has been backing a national anti-graft campaign against India's scandal-ridden Congress-led government in New Delhi. Earlier in the week, 84-year-old veteran BJP leader L.K. Advani set off on a five-week nation-wide road trip to put pressure on the Congress-led national government to tackle corruption.
Corruption has become a burning issue in Indian politics, with huge anti-graft protests in August triggered by activist Anna Hazare's hunger strike in New Delhi. Some 14 people including former national telecom minister A. Raja are in a New Delhi jail facing trial over the alleged rigging of the awarding of mobile phone licences in 2008 that cost the central government up to $39 billion in lost revenue.