Ms Choi Soon Sil, the woman at the centre of South Korea's biggest political scandal involving the President, was detained late last night.
Ms Choi, facing growing public fury after her return from overseas, was taken into custody under "emergency detention".
The prosecution will later request a formal arrest warrant against the 60-year-old, a long-time friend of President Park Geun Hye, media reports said.
Earlier yesterday, Ms Choi turned up at the Seoul Central District Prosecutor's Office to face questions on charges of corruption and meddling in state affairs.
"I have committed a sin deserving death," she said in a barely audible voice, choking with tears, after fighting her way through a mob of journalists. "I'm sorry. Please forgive me, people of Korea."
Under South Korean law, investigative authorities can put a suspect under emergency detention if they have reasonable grounds to believe the suspect has committed a crime to warrant the death penalty or life sentence, and believe the suspect is a flight risk who may also attempt to destroy evidence, Yonhap reported.
Ms Choi, daughter of a religious cult figure, is accused of using her intimate friendship with President Park to exert extensive influence over major governmental decisions and raise billions of won in funds from conglomerates for two non-profit organisations - Mir and K-Sport - which she founded.
Critics have called her "Female Rasputin", drawing parallels between her and Russian cult figure Grigori Rasputin who exerted influence over Russia's last czar.
Ms Choi fled to Germany in September when news of the scandal first broke. She returned on Sunday but prosecutors granted her a day to rest before reporting for investigations, triggering criticism that it would give her time to destroy key evidence.
The prosecution has called in numerous people linked to the controversy and visited President Park's office over the weekend to collect evidence.
Ms Park, meanwhile, has not responded to numerous calls for her impeachment and resignation. She has not made any official comment after her apology last Tuesday for allowing her friend to edit some of her speeches.
On Sunday, Ms Park accepted the resignation of eight key aides, including her chief of staff, in a bid to regain the trust of the public.
Analysts said the President will most likely remain in office to avoid a political vacuum, but there have been calls from both her ruling Saenuri party and the opposition to set up a neutral Cabinet with some of Ms Park's powers delegated to a new prime minister.
Her spokesman, Mr Jung Youn Kuk, said the President has been meeting and gathering feedback from opinion leaders, scholars and senior Saenuri members, before deciding her next move.
Last Saturday, thousands of people took to the streets to call for Ms Park's resignation.
Dozens of protesters were waiting for Ms Choi when she arrived at the prosecutor's office yesterday. Chants of "Choi Soon Sil, go to jail, Park Geun Hye, step down" reverberated as they held up signs to express their anger towards the woman accused of being the puppeteer controlling the President's every move.
Housewife Kim Soo Hyun, 39, said her husband and his friends joined the protest last Saturday and she may go out this weekend too. "Everyone is so angry because of the scandal, even my kids. Park is no longer qualified to be our President. Our country has been shaken by a shaman and it is such a shame to tell our children this."
Office manager Jay Lee, 45, said he is furious and upset. "Our whole top decision-making process has collapsed. We are like a 19th-century country where the empress dowager controls the king. Park has betrayed and destroyed Korea's democratic political system. She has to step down."