The allegations were made under a plea deal by Sergio Machado, the former president of Transpetro, a subsidiary state oil giant Petrobras, which is embroiled in a massive bribe and kickback scandal.
According to Machado, Temer sought donations from Transpetro in 2012 to support the campaign of a Sao Paulo mayoral candidate.
The probe, announced by Judge Teori Zavascki late Friday, also cites several prominent policitians from Temer's Brazilian Democratic Movement Party (PMDB), his Brazilian Social Democracy Party (PSDB) allies and the Workers Party (PT) of deposed president Dilma Rousseff and her mentor and predecessor Luiz Inacio Lula da Silva.
Under the corruption scheme, Petrobras allegedly gave over-inflated contracts to other big firms, such as OAS and construction rival Odebrecht.
The scheme was allegedly orchestrated by high-ranking politicians who took bribes from the contractors, for themselves or to fill party coffers.