Bolivia's former president, Luis Arce, has been arrested in La Paz as part of an investigation into alleged graft, the government has said.

The investigation relates to when Arce, 62, was economy minister under then-president Evo Morales, who was in office from 2006 to 2019.

He is accused of authorising transfers from the public treasury to the personal accounts of political leaders.

Arce, who left office last month, is yet to comment but his former colleague María Nela Prada said he was innocent and described the arrest as a "total abuse of power".

The Attorney General's office requested Arce be detained over the alleged crimes of "breach of duty and uneconomical conduct", according to the arrest warrant issued by the interior ministry.

Attorney General Roger Mariaca told local media that Arce, who was president from 2020 until last month, had invoked his right to remain silent during police questioning.

He said Arce would remain in police custody overnight before being brought before a judge to determine whether he will remain detained pending trial.

Mariaca denied that the arrest was political persecution.

Investigations into an alleged multi-million dollar embezzlement at the Indigenous Peoples Development Fund (Fondioc) have been going on for years.

Resources intended for indigenous community development projects were allegedly diverted, projects were left unfinished or never existed.

Several officials and politicians have been implicated in the case including Lidia Patty, a former lawmaker for the MAS party, whose testimony has been used by the Attorney General's Office to request arrests.

Bolivia's Vice-President Edmand Lara said the arrest of Arce was part of an anti-corruption campaign.

"All those who have stolen from this country will return every last cent and will be held accountable before the law," he added.

The arrest comes less than two months after centrist candidate Rodrigo Paz won the October runoff election, ending nearly two decades of dominance by the leftist MAS party that Arce, who decided not to seek re-election, represented.

Under Bolivian law, members of the outgoing executive branch may not leave the country for 90 days after a change in government.

In his first week in office, which started last month, President Paz said he had unearthed "a cesspool" of graft by preceding leftist governments.

As an audit is done of public enterprises, prosecutors this week arrested six former executives of state oil company YPFB on corruption charges.