Police said Mr Gava, a 64-year-old former Christian Democrat who has previously denied similar accusations, was picked up before dawn at his home in Rome and remanded in custody at a military prison in the capital.
Mr Gava, who held the country's most sensitive portfolio from 1988 to 1991, was the most prominent member of the political old guard to be arrested in Italy's judicial assault on corruption.
Dozens of other suspects were also held, including a former deputy chairman of parliament's justice commission, businessmen and alleged clan bosses of the Camorra, the section of the Mafia controlling Naples. The public prosecutor in Naples said 98 arrest warrants had been issued and assets worth hundreds of billions of lire confiscated as part of the operation.
The arrests follow testimony made by Carmine Alfieri, undisputed chief of the Camorra clans for a decade until his arrest in 1992, and Pasquale Galasso, his leading lieutenant.
Mr Alfieri, who wrested control of the clans in a war littered with corpses, broke organised crime's code of silence in March saying that he wanted 'to bring myself closer to God'. Mr Gava's power- base in Naples, dubbed Italy's 'kickbacks capital' by investigators, made him baron of one of the most powerful factions in the once mighty Christian Democrat party. The interior ministry gave Mr Gava control over police, civil intelligence and the fight against organised crime.
Roberto Maroni, who is the Interior Minister now, said Mr Gava's arrest illustrated the revolution in Italian politics. Mr Maroni, a member of the Northern League, is the first non-Christian Democrat to hold the interior ministry portfolio since the Second World War.