Zhou, 71, who retired from the country's all-powerful Politburo Standing Committee (PSC) of the Communist party in 2012, also held the most powerful post as the head of the country's national security.
Zhou is under investigation for "serious disciplinary violation," the party announced yesterday.
Chinese official media hailed in unison that the anti graft probe against Zhou, who was all powerful under former President Hu Jintao's leadership, as the most audacious move by Xi.
"This is a big deal," said Professor Steve Tsang, director of the China Policy Institute at the University of Nottingham in Britain.
"It breaks the convention that Politburo Standing Committee members are untouchable for criminal transgressions," he told Hong Kong based South China Morning Post.
Other analysts and party sources said the announcement was intended to reduce behind-the-scenes struggles among top power holders and reunite the party under one banner ahead of a key gathering next month.
The Beidaihe summit (an informal conclave of senior Chinese party leaders) is traditionally held in August.
Experts say Zhou, like his key party ally and disgraced leader Bo Xilai, would eventually face public prosecution.
After public trial, Bo had been sentenced to life imprisonment.
Their downfalls are possibly linked. Zhou was said to be a political patron of Bo. The two had allegedly teamed up in a failed attempt to grab power, the Post report said.
Du Guang, a retired professor at the Central Party School, said it would be difficult to expose all the alleged crimes that Zhou had committed because "it would bring a much bigger crisis for the party".
He agreed Zhou's case was likely to be heard in public.
A person connected with the party inner circle said Zhou had tried to meet former president Jiang Zemin, who was seen as his political patron.
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