The Corruption Investigation Office for High-ranking Officials (CIO) leading the investigation on Thursday transferred the case to the prosecutors' office and requested they indict Yoon for insurrection and abuse of power.
Yoon, impeached and suspended from power on December 14, has been incarcerated since last week while investigators probe his attempt to impose martial law - a move that shocked the nation even though it was overturned within hours by parliament.
The Constitutional Court will decide whether to remove Yoon from office. (EPA PHOTO)
The CIO has said Yoon's detention is due to end around January 28, and they expect prosecutors to ask the court to extend it for another 10 days before they formally charge the president.
But on Friday the Seoul Central District Court rejected the request by the prosecutors' office, saying there were "no substantial reasons" why the prosecutors would continue the investigation after securing evidence from the CIO, news agency Yonhap said.
The prosecutors' office and the court were not available for comment.
Yoon's lawyers have consistently said the CIO has no authority to handle his case as the law stipulates a wide-ranging list of high-ranking officials and violations it can investigate, but makes no mention of insurrection.
They also said any criminal investigation should be conducted after the Constitutional Court decides whether to remove Yoon from office in a separate trial on his impeachment.
The lawyers issued a statement on Friday welcoming the court's decision, saying the CIO probe was illegal and urging the prosecutors to restart the investigation.
