Adly, whose iron-fisted command of the country's police helped fuel a 2011 uprising that unseated longtime dictator Hosni Mubarak, was arrested in Cairo, lawyer Essam al-Batawy said.
State television also reported Adly's arrest.
He was sentenced in April to seven years in prison along with 10 other former officials for embezzling about $122 million.
He had been a fugitive since then. He had contested his sentence which an appeals court will examine in January.
The court dropped charges against Mubarak, who has since been freed, in the same trial.
Under Adly, the interior ministry was accused of practising systematic torture and the repression of dissent.
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