Mr Villar, a former Spain international footballer, has been president of the association since 1988.
His son Gorka was among a number of other people also arrested on Tuesday, AFP agency said.
Spain's High Court told Reuters that one of its investigating magistrates and anti-corruption prosecutors were leading the probe.
In Villar's time as president of the federation, Spain's men's football team has won two European championships as well as the 2010 World Cup, becoming one of football's dominant forces.
He has also served on the council of football's world governing body Fifa for the past 29 years.
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