Metropolitan Police Commander Ali Dizaei, 47, will be charged with misconduct in public office and perverting the course of justice.
Dizaei, president of the National Black Police Association, was suspended from the force last September.
The allegations were one of three inquiries under way into the senior officer's conduct.
They followed an investigation by officials the Independent Police Complaints Commission (IPCC).
The claims are linked to an incident outside the Middle Eastern Yas restaurant in Kensington, south west London, on July 18 last year.
Dizaei, who was wearing his uniform, arrested a young businessman after a row in which he claimed he was poked with the mouthpiece of a hookah water pipe.
It is the second time Dizaei has been accused of perverting the course of justice and misconduct in public office.
He stood trial at the Old Bailey in 2003 after it was claimed he lied about vandalism to his car. He was cleared on both counts.
Solicitor Gaon Hart, of the CPS special crime division, said: "These charges relate to an incident in which Mr Dizaei, in his capacity as a police officer, arrested a man on allegations including assault. A decision not to charge that individual was made by the CPS in August 2008.
"Following an investigation by the IPCC, a file was submitted to me in November 2008. I asked the IPCC to undertake further inquiries and I received the results of those inquiries this month."
Alfred John, chair of the Metropolitan Black Police Association, said the allegations are "outrageous".
He said his friend and colleague was "fully vindicated" in 2003, questioned the motives of his accusers and highlighted the cost to the taxpayer.
Mr John said: "The National Black Police Association and the Metropolitan Black Police Association fully support Commander Dizaei during the course of this prosecution.
"We will call to account those who use the public purse and the law to settle their personal vendettas."
Dizaei is being represented by Michael Mansfield QC, who is returning to the criminal courts from retirement.
Mr Mansfield's long list of famous cases include the Bloody Sunday inquiry and the inquests into the deaths of Diana, Princess of Wales, and Jean Charles de Menezes.
His solicitor is Imran Khan, best known for his work with the family of murdered teenager Stephen Lawrence.
No date has been set for a first court appearance. Dizaei was expected to be formally charged after attending a police station by appointment.
A close colleague of Dizaei it is "completely unprecedented" to take the same officer to court on such serious charges twice.
He said: "The trial is going to cost a lot of money but it will allow people to make up their own mind of what has happened."
The 2003 Old Bailey case was brought in the wake of a massive multi-million-pound secret undercover operation known as Operation Helios.
This failed to find evidence to substantiate claims Dizaei used prostitutes and spied for Iran in 1999 and 2000.
It became the most expensive inquiry into a single officer. The Met said it cost £2.2 million. Dizaei argued the figure was more like £7 million.
Dizaei was awarded £60,000 in compensation and reinstated to the force where he became a thorn in the side of a series of Scotland Yard commissioners.
In his role as president of the National Black Police Association, Dizaei lined up with critics of Sir Ian Blair's regime.
He was a close confidante of former Assistant Commissioner Tarique Ghaffur as he prepared to sue the force for racial and religious discrimination.
Dizaei was privy to closely-guarded details of Mr Ghaffur's dossier of evidence of alleged racism and discrimination.
As accusations of racism at Scotland yard continued to fly, Dizaei was suspended by the Metropolitan Police Authority.
Mr Ghaffur was put on gardening leave and eventually retired after receiving a substantial out-of-court settlement.
Last December, Dizaei launched a race claim of his own against Scotland Yard, claiming "systematic" discrimination.
The remaining two inquiries into Dizaei's conduct relate to claims he misused a corporate credit card and allegations he advised a solicitor on how to undermine a prosecution.
It is understood that the credit card inquiry, overseen by the IPCC, has found no evidence of wrongdoing. The third inquiry continues.
Dizaei was once tipped to become one of Scotland Yard's most senior ethnic minority officers.
Policing was in his blood. Born in Tehran in 1962, his grandfather had been assistant commissioner and his father was head of the traffic police.
Since moving to Britain he embarked on a career with Thames Valley Police in 1987 after leaving City University Law School.
Despite claiming to suffer racial abuse during formative years as an officer, he studied for an MA and eventually a PhD in his spare time.
Dizaei joined the Metropolitan Police as a superintendent in March 1999.
It was the year the Met was accused of institutional racism after an inquiry into police handling of Mr Lawrence's murder.
He immediately made an impression with his "flash" style and has admitted his taste for designer clothes and nightclubs alienated him from some colleagues.
Dizaei eventually published a book, titled Not One of Us, which sparked further ill-feeling against him from inside the force.
