"As part of an investigation into diesel affairs and Audi engines, the Munich prosecutor's office executed an arrest warrant against Mr Professor Rupert Stadler on June 18, 2018", the Munich prosecutor's office said in a statement.
Audi confirmed the arrest to AFP, declining to give further details. "The hearing to determine whether he will be remanded is ongoing", a spokesman for parent company Volkswagen said.
In the Reuters report, Stadler had his contract extended in 2017 and was named as a suspect alongside another unnamed member of Audi's board of management.
The Munich prosecutors said Mr Stadler's arrest was not made at the behest of USA authorities.
As of 2015, Audi has admitted to having utilized illegal cheat devices which manipulate their car's emissions with Stadler at the helm since 2007.
Munich prosecutors and Stadler himself were not immediately available for comment.
The dramatic development comes a week after Munich prosecutors raided Stadler's home after charging him with fraud and the falsification of documents that allowed diesel vehicles equipped with cheating software to be sold to European customers.
Almost three years on from the scandal, VW faces a multitude of probes both in Germany and overseas, with legal proceedings in 55 countries pending and investigations into stock-market manipulation in its home market. Two are serving prison terms; Winterkorn and the others remained in Germany and are unlikely to be extradited.
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