Finance Minister Lim Guan Eng said the yacht has set sail from the Indonesian island of Batam near Singapore and arrived in Malaysia's Port Klang on Tuesday.
Indonesia handed over to Malaysia on Monday a $250 million luxury yacht, impounded earlier this year as part of an global hunt for assets purchased with billions of dollars allegedly siphoned off from state fund 1Malaysia Development Bhd.
Earlier today, Datuk Seri Najib Razak, was expected to be arrested by the Malaysian Anti-Corruption Commission (MACC) after they have taken his statement to assist in the ongoing investigations.
In a Facebook video, Mahathir thanked Indonesia's government and President Joko Widodo for returning the US$250 million (AUD$337 m) yacht, Equanimity, which was seized by Indonesia off Bali in February in cooperation with the US FBI.
The superyacht arrived in Malaysian waters today and is now berthed at Port Klang. It was accompanied by a Malaysian navy frigate and 3 smaller vessels.
A spokesman for the prime minister's office said the yacht would arrive in Port Klang, west of the capital Kuala Lumpur, within the next 48 hours.
Najib, 65, and his family have faced intense scrutiny since May, when a shock election result brought his former mentor-turned-foe, 93-year-old Mahathir Mohamad, back to power.
Trump Lashes Out In Tweets, Claims Ignorance Of Trump Tower 'Dirt' Meeting
Any legal battle over whether the president can be compelled to testify could go all the way to the U.S. Supreme Court, the lawyer, Jay Sekulow, said on ABC's "This Week".
The ex-prime minister was arrested and charged with corruption last month.
The DoJ has sought to take custody of the Equanimity, after it was seized by Indonesia in February at the request of USA authorities as part of a multi-billion dollar anti-kleptocracy investigation into 1MDB.
Those assets include the 300-foot (90-metre) super-yacht owned by Low Taek Jho - popularly known as Jho Low - a close Najib associate and former unofficial adviser to 1MDB.
Mahathir said any claimants to the yacht should provide proof that it belonged to them, and where they got the money to pay for it.
Legal experts say the boat could bolster the case against Najib and others linked to the scandal.
Malaysia is trying to recover up to $1.7 billion in assets, including the yacht, that the DoJ has alleged were bought with stolen 1MDB funds.
After Mahathir announced Monday, August 6, that Indonesia was handing over the Equanimity, the DoJ sought to suspend ongoing legal action in the USA courts to take possession of the yacht.