Former Thai PM Yingluck Shinawatra will face a criminal charge over a controversial rice subsidy scheme, the attorney general's office says.
The news came as the legislature prepared to vote on whether to impeach her for dereliction of duty over the same scheme.
Critics say the rice policy cost the government billions and funnelled money to her party's power base.
Ms Yingluck was removed from office in May 2014 just before a military coup.
Her supporters say the claims against her are a ruse to remove her from politics.
Ms Yingluck's party is the most popular in Thailand and has - under various different names - won every election since 2001.
Surasak Threerattrakul, director-general of the Office of the Attorney General, said after considering all the witnesses and evidence from the National Anti-Corruption Committee "we agree that the case substantiates a criminal indictment charge against Yingluck".
If found guilty, she could be jailed for up to 10 years. If the military-backed legislature also votes to impeach her she will be immediately banned from politics for five years.
The BBC's Jonathan Head in Bangkok says the criminal charges on the same day as the vote are a clear indication that Thailand's military rulers have decided she must be removed from any future role in politics.
Members of the National Legislative Assembly (NLA) attend a session to discuss the budget bill for 2015 at Parliament in Bangkok on 18 August 2014.
'Already removed me'
Ms Yingluck and her brother, tycoon and former prime minister Thaksin Shinawatra, remain hugely popular among Thailand's rural poor, but are hated by an urban and middle-class elite who accuse them of corruption and abuse of power.
Since the military removed Mr Thaksin from power in 2006, Thailand has been locked in a cycle of political instability. The military coup in May 2014 followed a sustained street protest campaign by opponents to oust Ms Yingluck's government.
The allegations against her centre around a rice subsidy scheme in which Ms Yingluck's government bought rice from Thai farmers at a much higher price than on the global market.
It resulted in the accumulation of huge stockpiles of rice and hit Thailand's rice exports hard.
Ms Yingluck has maintained that she was not involved in the day-to-day running of the scheme. On Thursday she defended it as an attempt to support the rural poor.
Ms Yingluck will be impeached if at least 132 members of Thailand's 220-strong National Legislative Assembly vote in favour of the move.
In her statements to the assembly, she has repeatedly denied accusations of corruption and pointed out that she no longer holds any position in the government.
"There is no position to remove me from as the Constitutional Court has already removed me as prime minister," she said in her final statement on Thursday.
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