The US Department of Justice said in a statement that Alexander Yuk Ching Ma, 67, was arrested on Friday.
He was accused of leaking classified defense intelligence to Chinese intelligence officials.
This is the latest espionage arrest at a time when tensions between Washington and Beijing are increasing.
Mr. Ma is scheduled to appear in court on Tuesday, and if convicted, he will face a maximum life sentence.
Mr. Ma is an American citizen born in Hong Kong and started working in the CIA in 1982.
The prosecutor said he left the CIA seven years later to work in Shanghai, China, and then moved to Hawaii in 2001.
They accused Mr. Ma and his relatives of espionage for China for ten years, a plan that began in a meeting in Hong Kong in March 2001.
Former CIA officials are accused of sharing “information about CIA personnel, actions and concealed communication methods” with Chinese intelligence services.
The statement said that part of their meeting in Hong Kong was recorded on a videotape, showing that Jack Ma calculated $50,000 (£38,000) in cash for the secret they shared.
The court documents stated that during his stay in Hawaii, he subsequently sought cooperation with the FBI to obtain again confidential US government information and pass it on to China.
In 2004, he was hired the Honolulu Office of the FBI as a contract linguist and was accused of stealing secret documents.
It is not clear why it took so long to arrest Ma Yun.
The prosecutor said Ma Yun’s unnamed relative is now 85 years old. He is also an American citizen born in Shanghai.
The court document stated that the prosecutor is not currently seeking an arrest warrant for him because he is suffering from “advanced and debilitating cognitive disease.”
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