The UK's biggest arms dealer, BAE Systems, paid hundreds of millions of pounds to the ex-Saudi ambassador to the US, Prince Bandar bin Sultan.
The payments were made with the full knowledge of the Ministry of Defence.
Prince Bandar would not comment on the investigation and BAE Systems said it acted lawfully at all times.
The MoD said information about the Al Yamamah deal was confidential.
Sir Raymond Lygo, a former chief executive of BAE, told the BBC's World Business Report that there had been "nothing untoward" about the arms deal. BBC