Anas Urbaningrum, the chairman of President Susilo Bambang Yudhoyono's Democratic Party, is accused of receiving payments in connection with the construction of a sports complex in West Java. He has repeatedly denied wrongdoing.
Johan Budi, spokesman of the Corruption Eradication Commission, said there is enough evidence to declare that Urbaningrum violated the anti-corruption law.
He did not specify what kind of payment was allegedly received by Urbaningrum, but media reports say he was given a Toyota Harrier car worth about $75,000.
Budi said all five commissioners had agreed to name Urbaningrum a suspect, an apparent attempt to end speculation that there had been a rift in the commission.
The decision is the latest blow to the party's reputation and to Yudhoyono, its founder, who ran as "Mr. Clean" in his 2009 re-election campaign.
In a move to cleanse the ruling party, Yudhoyono, whose second five-year term ends next year amid widespread disappointment at his efforts to clean up endemic corruption, relieved Urbaningrum of his party duties early this month amid the corruption allegations.
Late last year, sports minister Andi Mallarangeng, another party official, was named a suspect in a corruption case involving the same sports complex. According to the state auditing agency, construction of the $122 million complex in Hambalang village involved many irregularities that caused up to 243 billion rupiah ($25 million) in losses to the state. The agency said the project was approved without a required environmental impact statement and the construction tender was rigged.
Mallarangeng is the country's first active Cabinet member to be named a suspect in a multimillion-dollar corruption case.
Last month, ruling party politician Angelina Sondakh, a former beauty queen, was sentenced to 4 1/2 years in jail after being found guilty of accepting $3.6 million in kickbacks from a company commissioned to build housing for athletes at the 2011 Southeast Asian Games.
Last year, party treasurer Muhammad Nazaruddin was sentenced to four years in jail for corruption.