Geddel Vieira Lima was a minister for legislative affairs until November, when he was forced to resign after another minister accused him of influence peddling. He has been a close friend of Temer's for decades and is implicated in a series of corruption scandals.
Federal prosecutors said in a statement that Lima was trying to silence former Lower House Speaker Eduardo Cunha and broker Lucio Funaro, who worked as fundraisers for Temer's centrist Brazilian Democratic Movement Party. Prosecutors accuse Lima of paying hush money.
Temer is already at risk of being suspended from office if Brazil's lower house authorises a corruption investigation against him. Brazil's top prosecutor Rodrigo Janot is also investigating the president on two other counts: obstruction of justice and criminal organisation. Much of the evidence has come through plea bargain deals.
For Temer to be suspended, two thirds of Brazil's 513- member Lower House would have to agree to send the case to the country's Supreme Court.
A vote on the case is expected to happen until the end of July.
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