PKR vice-president Rafizi Ramli, who was arrested over the leaked probe papers relating to 1MDB scandal, will be formally charged on Friday under Official Secrets Act.

Rafizi, a member of parliament from Pandan, will appear at the Sessions Court in Jalan Duta in the morning for arraignment under Section 8 of the OSA, his lawyer said.

On Thursday, the parliament speaker made a significant ruling that police had acted within their rights in arresting Rafizi Ramli.

Rafizi, a prominent leader of the People's Justice Party (PKR) established by jailed opposition figurehead Anwar Ibrahim, was arrested outside the Malaysian parliament on Tuesday.

Rafizi had distributed a page from the Auditor-General's classified report on state investment firm 1Malaysia Development Berhard (1MDB), Inspector-General of Police Khalid Abu Bakar said after the arrest.

Speaker Pandikar Amin Mulia said parliamentary privilege does not allow a lawmaker to commit criminal offences.

"The special rights and privileges is not absolute and are still subjected to the other available laws. It is a known fact that the OSA itself is an Act approved by the Parliament," Pandikar said, according to the Malay Mail.

The speaker also noted that the arrest took place outside the parliament compound. However, he added that he should have been informed of the arrest.

In March, Rafizi, who is also the secretary general of Parti Kedilan Rakyat (PKR), said the financial scandal at 1MDB had affected the Armed Forces Fund Board's (LTAT) ability to make timely gratuity payments, a charge IMDB vehemently denies.

PKR deputy president Azmin Ali said Rafizi's arrest was arbitrary and unlawful and called for his immediate release.

"Such a drastic measure by the police only serves to reinforce the impression that the rule of law is standing on its head, and the country's organs of power are more interested in shielding the political masters rather than the citizens," he said in a statement.