The two-time former premier, who boycotted elections in January, will go on trial from April 21 over charges that could see her jailed for life, according to lawyers at a special anti-corruption court in Dhaka.
Prosecutors say Zia and three of her co-accused siphoned off about $400,000 from a charitable trust named after her late husband Ziaur Rahman, a former president who was assassinated in 1981.
She is also accused of leading a group of five people, including her eldest son Tarique Rahman, in embezzling $270,000, funds which were meant to go to orphanage set up in memory of her late husband, prosecutor Mosharraf Hossain told AFP.
Zia's lawyer Masud Ahmed Talukder said the charges pressed by the country's anti-graft agency were "false and fabricated" and are part of a conspiracy to destroy Zia and her family.
"The court acted like a wing of the ruling party. It broke its own rules by charging her without questioning her. They were charged at the order of the government," he told AFP.
Zia, who is the leader of the centre-right Bangladesh Nationalist Party, has a famously poisonous relationship with the current premier Sheikh Hasina -- an enmity which dates back three decades.
The BNP boycotted January's election and Zia herself was kept under de facto house arrest for more than a week before polling day.
Hasina's and her Awami League party were overwhelmingly re-elected but the BNP and 18 other opposition parties which refused to field candidates over rigging fears denounced the contest as a farce.
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