Omar bin Sulaiman, the former governor of Dubai International Financial Center (DIFC), was detained in an investigation into accusations that he exploited his position to embezzle public funds, said the statement from Dubai's government.
"The investigation pointed out that Sulaiman, in his position as DIFC governor, had obtained funds under the pretext of annual bonuses totalling 50 million dirhams ($13.62 million)," the statement said.
Bin Sulaiman could not be reached for comment by phone.
The government statement quoted a prosecutor as saying that a number of similar cases would be brought before the legal system in the future.
Dubai, the Gulf's tourism and traing hub, launched a high-profile anti-corruption campaign in 2008 that saw the arrest of several well-known business figures.
Bin Sulaiman, who held a number of other high profile positions, was abruptly removed from his post as governor of the DIFC in November, days before the Dubai World debt crisis erupted, to be replaced by Ahmed Humaid Al-Tayer.
The decision by Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum to appoint Al-Tayer was part of efforts to "improve performance in Dubai government and semi-governmental departments" and to boost the emirate's position as a global financial, trade and tourism center.
Dubai's government set up the DIFC in 2002 in a bid to turn the regional trading and tourism hub into a world financial center on a par with Singapore and Frankfurt.
The emirate's rapid expansion came to a grinding halt when the financial crisis struck, leaving it with an estimated debt burden of $101 billion.
