Zhou, 71, who retired from the country's all-powerful Politburo Standing Committee (PSC) in 2012, is under investigation for "serious disciplinary violation," state-run Xinhua news agency reported.
The term "serious disciplinary violation" in Communist Party of China (CPC) parlance refers to corruption and abuse of power.
The decision to probe Zhou, one of the most powerful politician in China, is a significant political move by Xi who has promised to tackle corruption, one of the major issue faced by the Communist Party that has monopolised power in the world's most populous nation since 1949.
Zhou was the ninth-ranking member of nine-membered Standing Committee of the CPC headed by former Party leader and ex-President Hu Jintao, who handed over power to Xi last year.
Hu retired last year after the decade-long political leadership change in the Party.
Zhou was considered the security Czar as he headed the country's powerful internal security department till last year.
The move to place him under investigation is regarded as politically significant as this is the first time that a retired high ranking leader is being prosecuted, deviating from an established CPC norm for decades that retired leaders are not to be touched.
With the official announcement of a probe, Zhou becomes the senior most member of the Communist Party to be investigated since the infamous Gang of Four -- a faction that included the widow of founding leader Mao Zedong -- in 1980.
Zhou's downfall began when he backed the disgraced party leader, Bo Xilai.
Bo is currently serving a life sentence for corruption, abuse of power and hounding a top police officer investigating his wife's involvement in a murder case, who escaped to US Consulate in Chengdu to seek asylum.
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