The questioning of Moshe Katsav at his home in Jerusalem could take several hours, Micky Rosenfeld, a police spokesman said on Wednesday.
Katsav has denied any wrongdoing and a spokeswoman said this week the president was co-operating with the investigation. The scandal is unlikely to have significant political repercussions as Katsav's post is largely ceremonial.
If police bring charges, Katsav is immune from standing trial but could be impeached by parliament if it determines that he acted inappropriately. He has been president since 2000.
Police seized computers and documents from his residence on Tuesday.
The scandal involving Katsav and separate allegations against other public figures have darkened the mood in Israel, where the leadership is under fire over the costly month-long war in Lebanon.
Haim Ramon, the justice minister, resigned on Sunday after the attorney general said he would indict him over allegedly forcing a kiss on a government employee.
Israel's government watchdog is examining the terms of purchase of a Jerusalem apartment for $1.2 million in 2004 by Ehud Olmert, the Israeli prime minister.
Military chief Lieutenant-General Dan Halutz has also been criticised for selling his stock portfolio hours after Hezbollah fighters kidnapped two Israeli soldiers in a cross-border raid on July 12 that triggered the Lebanon war.