Gu Yuese was removed from his post as head pastor at Chongyi Church in Zheijiang province earlier this month.
Chongyi Church is the biggest state-controlled church in China, with thousands of people coming through its doors every week.
It's been reported from Christian advocacy charities and pastors on the ground in China and Hong Kong that Mr Gu was removed from his post because of his vocal opposition to the government's removal of church crosses.
The religious freedom charity China Aid has said that the Chinese government's removed at least 1,800 crosses over the past few years in an attempt to control Christianity, and has also completely demolished several other church buildings it has deemed to be illegal.
The Chinese government has said the crosses it's taken down have violated planning and safety laws, or been used as part of activity illegal under Chinese law.
Officials in Zheijiang have not elaborated on the evidence which led to the embezzlement investigation against Gu Yuese.
China Aid told the BBC that the Chinese government's allegations of embezzlement were "political revenge" against Mr Gu because of his opposition to church cross removals.
The advocacy charity has also said on its website that Mr Gu is now being detained in an unlisted "black" prison.