Abu Bakr Bashir was also charged on Wednesday with heading the al-Qaida-linked Jamaah Islamiyah group, blamed for both the August 2003 Jakarta Marriott hotel blast which killed 12 and the October 2002 Bali bomb strikes in which 202 died.
"He has been charged with terrorism," prosecutor Haryono told reporters, shortly after the elderly preacher was transferred from police detention to a state prison in Jakarta.
The move to charge Bashir, 65, follows weeks of fraught legal wrangling, as police and prosecutors struggled to build a case after Indonesia's top court robbed them of the right to use anti-terror laws to convict Bashir over Bali.
Last month, the Constitutional Court said powerful legislation rushed into law in the wake of the Bali blasts could not be backdated to cover that attack - although it can be used to try suspects in the subsequent Marriott strike.
The court said existing Bali-related convictions would stand. But a judge's decision on Tuesday which dismissed charges against a key suspect in the resort island attacks had fuelled fears that many key bombers would escape justice.
Canberra seeks convictions
Reacting to the charges against Bashir, Australian Foreign Minister Alexander Downer said his country, which lost 88 people in Bali, did not care what charges the perpetrators faced provided they were convicted.
"The issue for us is that Abu Bakr Bashir face justice for his alleged involvement in terrorism," he told reporters. "Abu Bakr Bashir is the spiritual leader of Jamaah Islamiyah, which was the organisation responsible for the Bali bombing."
The cleric's arrest has prompted
protests calling for his release
Bashir denies terror links and was cleared by an appeal court last year although he remained in jail for immigration-related offences. He was released in April, but immediately rearrested, prompting violent protests by supporters.
Although prosecutors can no longer charge Bashir directly for the Bali attack, they say they have now built a watertight case and say the cleric will face heavy punishment over the Marriott incident and his Jamaah Islamiyah role.
The indictments against Bashir accuse him of moulding Jamaah Islamiyah from a Muslim group created in 1993. He is also accused of attending a "terrorist" graduation ceremony at a camp in the southern Philippines which trained the Marriott and Bali bombers.
He additionally faces a lesser charge of "taking part in a sinister conspiracy" by approving the Bali attack, under a law which allows a maximum eight years' sentence.
"I do not accept the arrest," Bashir said, denouncing the move as part of a US-masterminded plot against Islamic interests.
Lawyers representing Bashir also condemned the charges. They said the cleric could not have been involved in the Marriott attack as he was behind bars at the time and accused authorities of using him as a scapegoat.
Bashir was arrested in October 2002, a week after the Bali blasts.