A majority of 319 deputies voted to lift the parliamentary immunity of Alfonso Papa from the People of Freedom party, after Berlusconi's coalition partner, the Northern League, said it was breaking ranks with the government.
Papa, who claims he is innocent and "a political prisoner," turned himself in to the police and was taken to a prison in the southern city of Naples late Wednesday.
Naples prosecutors had called for his detention since mid-June but a parliamentary vote was necessary before this could happen.
Papa quit the parliamentary group of Berlusconi's party on Friday.
The Northern League voted "yes, like we said," Interior Minister Roberto Maroni, a leading member of the populist party, told reporters after the vote.
Berlusconi, himself a defendant in three ongoing trials on charge including bribery, tax fraud and paying for sex with a 17-year-old girl, had spoken out against Papa's arrest as part of a wide-ranging political corruption inquiry.
Berlusconi's popularity has plunged in recent months following a series of scandals involving him and continued economic troubles.
The People of Freedom party also lost key local elections in May and the prime minister suffered a further defeat in referendums on his policies last month.
Papa, a former magistrate, said he spoke to Berlusconi after Wednesday's vote. "Berlusconi is an extraordinary person. He has been close to me in this affair," he said.
Papa is accused of providing classified information to businessmen on investigations against them in return for gifts including jewelery and stays in luxurious hotels.
Berlusconi declined to comment but said earlier that he considers the investigation "shameful," according to Italian news media reports.
"This is a political setback," said Pier Luigi Bersani, leader of the main centre-left opposition Democratic Party.
"In different times, the call for unity within the ruling majority would have worked but it's clear something is broken," he said.
Deputy Infrastructure Minister Roberto Castelli, of the Northern League, meanwhile warned that Berlusconi would be in for "another letdown" Thursday when he would vote against funding of the military mission in Libya.