Football Kenya Federation (FKF) boss Nick Mwendwa was picked up by police at a Nairobi hotel the day after the government set up a caretaker committee to run the body and further investigate alleged financial irregularities during his tenure.
The reign of the 41-year-old Mwendwa, who has been FKF president since 2016, has been dogged by controversy and claims of impropriety.
"He has been arrested and is being interrogated at the headquarters," said George Kinoti, Director of Criminal Investigations.
Sports Minister Amina Mohamed on Thursday announced the disbanding of the FKF after a government investigation found it had failed to account for funds received from the government and other sponsors.
She named a committee headed by a retired high court judge to run the federation's affairs for an interim period of six months and said there would be a further probe that could lead to prosecutions.
However FIFA warned Kenya it risked a ban if the government did not reconsider what football's world governing body branded an "abrupt" announcement.
It said the action was "undoubtedly contrary" to the principle that all FIFA member associations are required to manage their affairs independently and without any undue third-party influence.
"Should this be considered as undue government interference in the internal affairs of the FKF, it would lead to a ban imposed on the FKF by the competent FIFA body."
"In such a case, all of Kenyan football shall suffer the consequences."
Mwendwa himself had vowed to fight the government move and insisted there had been no wrongdoing.
"I am still... in charge of the FKF. We won't accept the decision taken by the sports ministry," he told a press conference on Thursday.
Meanwhile, the FKF caretaker committee announced the suspension of all men's and women's football league activities for a period of two weeks from Friday.
Kenyan football has long been beset by financial woes often stemming from poor management and corruption.
A Nigerian sports betting firm in August cancelled its sponsorship of Kenya's main football league days after two of the country's top teams complained of non-payments.
It faced a financial crisis after the exit of another title sponsor, online gaming firm SportPesa, in September 2019 following a protracted tax row with the government.
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