Lu had been nicknamed the "golden whistle" for his supposed integrity during an earlier match fixing scandal which rocked Chinese football eight years ago.
Depending on the amount of money involved, and if he is found guilty of taking money as a public servant, he could face the death penalty.
The other two referees arrested were Huang Junjie, a nominee last year for the China Super League's best referee award, and Zhou Weixin, who retired in 2004 after being given an eight-game suspension by the national association for a bad call.
Wei Di, the head of the Chinese Football Association (CFA), was quoted by the China Daily as saying he was "shocked" and "hurt" at news of Lu's arrest.
"He is undoubtedly a first-rate referee in terms of working ability, but his morals are a far cry from his 'golden whistle' reputation," he said.
|China's football leagues have been rocked by the growing scandal [GALLO/GETTY]
Wei took over as head of the CFA after his predecessor was arrested as part of the sweeping crackdown against corruption in the game.
As part of the CFA's crackdown two Chinese Super League clubs have also been relegated to the second tier for being associated with corruption.
A second division team from the northeastern city of Qingdao was kicked out of professional football altogether for match-fixing.
Facing intense pressure from China's leaders, Wei has pledged to end such activities, but has complained of issues that include a lack of transparency, autocratic management, and strong ties between coaches, players and gambling syndicates.
Last week, more than 200 referees were sent on a five-day "Anti-corruption Rectification Education Camp".
China's leaders have also linked corruption and poor league management to the lowly state of China's national team, which currently ranks 83 in the world.