The district court's ruling granting a prosecution request came a day after Chen was questioned for six hours on embezzlement, fraud, bribe and money-laundering allegations arising from his two-term presidency which ended this year, the Central News Agency reported.
Chen, who has denied the charges against him, shouted "political persecution!" while being led in handcuffs to the Taipei District Court for his hearing, the report said.
At one point, the judges allowed him to be taken to a hospital after he complained of being uncomfortable, saying he had been stricken by a police officer, the report said. Doctors were quoted as saying Chen's right arm muscles had been strained but was otherwise all right.
Chen's wife was indicted on corruption and forgery charges in November 2006 for allegedly using receipts provided by others to claim reimbursements, CNA reported.
Chen, who led Taiwan before President Ma Ying-jeou, has been quoted as saying he is the top prisoner of war of Ma's ruling Kuomintang and the Communist Party of China since he remains the "biggest hurdle for the two parties to move toward unification."
Ma came to power on a platform supporting closer economic and trade ties with the mainland.
China, which claims sovereignty over Taiwan, has threatened use of military force if the island nation pursues independence. The countries have been ruled by separate governments for six decades.