Hammad Azhar, an aide of Khan and a former minister in his cabinet, called for supporters to come out to the streets in a video message released by his party.
The arrest comes at a time when ordinary Pakistanis are reeling from the worst economic crisis in decades, with record-high inflation and anaemic growth. It also comes amid a dispute with the military dating to 2021.
An International Monetary Fund bailout package has been delayed for months even though foreign exchange reserves are barely enough to cover a month's imports.
Previous attempts to arrest Khan from his Lahore home resulted in heavy clashes between his supporters and law enforcement personnel.
The National Accountability Bureau (NAB) issued Khan's arrest warrants on May 1, according to an order seen by Reuters.
Khan's graft case is one of over 100 registered against him since he was ousted from power in a parliamentary vote in April last year. He served four of his five-year term.
Footage of paramilitary troops in riot-control gear showed them entering the court and arresting Khan.
Khan's lawyer, Aqul Niazi, claimed his client was assaulted and was sprayed with a substance that nearly left him unconscious.
Khan's arrest comes a day after the powerful military issued a rare public rebuke of the former premier for repeated accusations against a senior military official of attempting to assassinate him and the military's former chief of being behind the move to remove him from power.
A high court in Islamabad has summoned authorities to explain Khan's arrest on court premises.
Interior Minister Rana Sanaullah told reporters that Khan had been arrested by the National Accountability Bureau (NAB) after he did not appear "despite notices".
He said the charges against Khan were that he and his wife had received land worth up to 7 billion rupees ($24.70 million) from a land developer that had been charged with money laundering by British authorities.
He added that British authorities had returned 190 million pounds ($240 million) to Pakistan in connection with money laundering, which Khan then returned to the land developer instead of keeping it in the national exchequer.
Khan had denied wrongdoing.
Former Pakistan PM Imran Khan arrested, sparking protests
Dozens of supporters blocked streets in Lahore on Tuesday, following the arrest of Khan.
Protesters also blocked a major road in the port city of Karachi, according to Reuters witnesses.
Khan's Pakistan Tehreek-e-Insaf (PTI) party called on supporters to "shut down Pakistan."
"It’s your time, people of Pakistan. Khan has always stood for you, now it's time to stand for him," the PTI wrote on Twitter.
Khan, 70, a cricket hero-turned-politician, has shown no sign of slowing down since he was ousted as prime minister last year, even after being wounded in a November attack on his convoy as he led a protest march to Islamabad calling for snap general elections.
Reuters