The Samsung heir, Lee Jae-yong, has been formally arrested as part of a probe into the "Choi-gate" corruption and influence-peddling scandal that led to the impeachment of Park Geun-Hye as South Korea's president.
Prosecutors claim Samsung paid up to 43 billion won ($37.6 million) in bribes to South Korean officials to secure government favors, primarily relating to the merger of two Samsung units.
"The rationale for and the necessity of (Lee's) arrest is acknowledged considering the new charges and additional evidence collected", the court told reporters in a text message.
Lee had been waiting for the decision at a Seoul detention center, Bloomberg reported.
Since his father was incapacitated by a hear attack previous year, Lee has been attempting to run the company, however, his progress has been impeded first by the Note 7 scandal and then, by Samsung's alleged involvement with the highly publicized corruption case involving the South Korean President. It may take as long as 18 months for a trial or verdict, Bloomberg said. The special counsel also asked for a warrant for the arrest of Samsung Electronics President Park Sang-jin but the court rejected it, saying " it is hard to recognize the necessity and reason for the arrest". Samsung declined to comment.
Samsung Group, which oversees almost 60 affiliate companies, has denied allegations that it provided financial aid to Ms Park's confidante Choi Soon Sil in return for political favours.
Despite this and the massive recall of its Galaxy 7 smartphone, which stemmed from a critical battery problem, Samsung Electronics shares are up by 60% over the past year.
Unless significant new evidence has emerged, it is highly unusual for a prosecutor to apply for an arrest warrant for a criminal suspect for a second time. That merger helped to give more control of Samsung over to Lee's family.
His grandfather and founder of Samsung Group Lee Byung-chul faced smuggling charges in 1966 but his son was jailed instead of him. The court rejected the request to detain Samsung Electronics President Park Sang-jin.
Lee has become the first Samsung boss to be arrested.
But the deal went through after Seoul's state pension fund - a major Samsung shareholder - approved it.