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Othon Luiz Pinheiro da Silva was held under preventive detention at the Bangu prison complex in Rio de Janeiro on Wednesday for alleged "operational fraud," the government's Agência Brasil news service said.
Prosecutors also announced that current Eletronuclear CEO, Pedro José Diniz Figueredo, has been suspended from his duties for allegedly colluding with Pinheiro da Silva and "interfering" with the company's internal investigations.
Pinheiro da Silva, who quit as head of Eletronuclear last August, was already under house arrest in Rio after being cited in plea-bargain statements last year.
Prosecutors allege the 77-year-old formed part of a "contractors club" that siphoned off millions of dollars from contracts to build the Angra 3 nuclear power plant (pictured).
His arrest came as federal police launched Operation Pripyat, the latest phase of their 18-month Lava Jato investigation. Some 35 warrants were issued in Rio de Janeiro and Porto Alegre on Wednesday: six for preventive detention, three for temporary detention and 26 for search and seizure.
ANGRA 3 GRAFT
Pinheiro da Silva was among eight people charged with money laundering, passive corruption and organized crime last August.
Investigators alleged he skimmed up to 30mn reais (US$8.5mn) from Angra 3 engineering and construction contracts.
Pinheiro da Silva's daughter, Ana Cristina Toniolo, was also among those indicted, as was Flávio David Barra, the CEO of builder Andrade Gutierrez Energia.
Originally slated to begin operating in 2016 at a cost of 10bn reais, the Angra 3 plant's opening has been postponed until at least 2018. The project's latest cost estimate is 19.6bn reais.
Federal police have arrested scores of former Petrobras directors, engineering firm executives and politicians since Lava Jato was launched in early 2014.