He is accused of receiving $280,000 (£230,000) from a British businessman “and other items”.
The British businessman, Zuneth Sattar, is under arrest in the UK where he is accused of using connections with senior Malawi government officials and politicians to fraudulently obtain contracts to supply goods and services. Mr Sattar has denied all wrong doing.
The Financial Times reported that the contracts covered water cannons, food rations, and armoured personnel carriers.
The vice president would be taken to court where he is expected to be charged with three counts of corrupt practices by a public officer, among other charges, the corruption watchdog added.
Mr Chilima came to power in 2020 as the running mate of President Lazarus Chakwera. He had previously campaigned on an anti-corruption platform, promising to end decades of sleaze in government and ending poverty in one of the world’s most poorest countries.
In June this year, Chakwera stripped Chilima of all powers after the latter was first named in corruption allegations by the ACB. According to Malawi’s constitution, the president cannot suspend or remove Chilima because he was an elected official.