Ai Baojun, Shanghai's deputy mayor and director of the Shanghai free trade zone, has been placed under investigation on suspicion of violating Party discipline.
The investigation was announced by the Central Commission for Discipline Inspection on its website on Tuesday.
Ai, 55, is a member of the Standing Committee of the Communist Party of China Shanghai Municipal Committee.
He is the first municipal-level official in the city to be investigated since the central government stressed its resolve to tackle corruption after the 18th National Congress of the Communist Party of China in 2012.
Between 1994 and 2007, Ai worked at Baosteel Group Corp of Shanghai, rising to become general manager. He was also chairman of Baoshan Iron and Steel Co Ltd at the same time.
Ai was appointed deputy mayor of Shanghai in December 2007 and became a municipal Standing Committee member in May 2012.
In September 2013, he became director of the China (Shanghai) Pilot Free Trade Zone Administration Committee. The same month, he was appointed director of the Shanghai International Tourism and Resort Zone Administration Committee. The Shanghai Disney Resort is located in the zone.
Ai made his most recent public appearance at a news conference on Saturday.
Shanghai Party Secretary HanZheng said during a meeting of the standing committee on Tuesday that Ai's case is "very distressing".He called on all cadres and Party leaders to take this as a warning.
"When we talk about strictly administering the Party, we should first of all strictly administer the leaders who are in the minority but play the key roles," Han said.
"We should be strict with ourselves, work as role models and set higher standards to restrain ourselves, our relatives and colleagues.
"We should fully understand that the current situation of building a clean and honest Party administration, as well as the anti-corruption struggle, remains quite serious."
Han said the Party should remain firm on combating corruption and crack down on and penalize any such cases.