UPDATED: 10:00 a.m.
The "Empire" star was taken into custody around 5 a.m. CT, police said, ahead of a 1:30 p.m. bail hearing.
Smollett faces a felony charge of disorderly conduct for allegedly filing a false report claiming he was attacked by two men, including one who was masked, in the early morning of January 29 in Chicago. He alleged they yelled racist and homophobic slurs, tied a rope around his neck and poured an unknown substance on him.
At the time, police said they were treating the attack against the black and gay actor as a hate crime.
But in the weeks since the alleged attack first made headlines, the narrative has unraveled with several twists, transforming him from a victim to a suspect.
Chicago Police Department spokesman Anthony Guglielmi tweeted Wednesday that the Cook County State's Attorney's Office had approved a felony criminal charge of disorderly conduct against Smollett.
Under Illinois law, filing a false police report is disorderly conduct and punishable by one to three years.
The actor has denied playing a role in his attack, according to his attorneys.
"Like any other citizen, Mr. Smollett enjoys the presumption of innocence, particularly when there has been an investigation like this one where information, both true and false, has been repeatedly leaked," his attorneys said in a statement.
"Given these circumstances, we intend to conduct a thorough investigation and to mount an aggressive defense."
Outpouring of support turned to doubts
For weeks, Smollett has stood by his initial claims that he was attacked.
He received an outpouring of support from celebrities and politicians immediately after he reported the alleged attack. But the backlash and doubters grew louder, with social media users questioning his claims of the attack especially after police said they could not find video of the incident from surveillance cameras in the area.
Police now believe Smollett paid two brothers to orchestrate an assault on him, two law enforcement sources with knowledge of the investigation told CNN this week.
By Wednesday, Chicago police said they were looking into the incident as a possible hoax. The announcement came the same day the Cook County grand jury met to review evidence of the incident.
Video appears to show brothers buying items
As new details emerged in the case, police have said they want to conduct a follow-up interview with the actor following "some developments."
While they did not provide specifics on the developments, surveillance video from January 28 obtained from a Chicago-area beauty supply store appears to show the men connected to the incident purchasing a ski mask, sunglasses, a red hat and other items the day before the alleged assault.
They paid for the items in cash, according to the owner, who did not want to be identified.
The two men questioned by police -- identified as brothers Olabinjo Osundairo and Abimbola Osundairo -- were initially arrested February 13 but released without charges after police cited the discovery of "new evidence." They've met with police and prosecutors at a Chicago courthouse, police spokesman Tom Ahern said.
The two are no longer suspects at this time, Chicago police have said. The brothers' attorney, Gloria Schmidt, told reporters Wednesday that her clients had not accepted a plea deal or immunity. Police sources said the brothers are cooperating with law enforcement.
"You don't need immunity when you have the truth, " she said.
In a joint statement issued to CNN affiliate WBBM, the men said: "We are not racist. We are not homophobic, and we are not anti-Trump. We were born and raised in Chicago and are American citizens."
One of the men has appeared on "Empire," Guglielmi said. A police source also told CNN the men had a previous affiliation with Smollett but did not provide additional details.
Smollett is angered by allegations, lawyers say
Smollett has played a gay character on the Fox TV drama "Empire." The actor told detectives two men attacked him near the lower entrance of a Loews hotel in Chicago, according to police spokesman Guglielmi. Police were told the two men yelled, " 'Empire' fa***t" and "'Empire' n***er,' " while striking him.
In a supplemental interview with authorities, Smollett confirmed media reports that one of the attackers also shouted, "This is MAGA country," a reference to President Donald Trump's "Make America Great Again" campaign slogan.
Todd S. Pugh and Victor P. Henderson, issued a statement Saturday, describing their client as angry about allegations he orchestrated the attack.
"As a victim of a hate crime who has cooperated with the police investigation, Jussie Smollett is angered and devastated by recent reports that the perpetrators are individuals he is familiar with," the statement said.
"He has now been further victimized by claims attributed to these alleged perpetrators that Jussie played a role in his own attack. Nothing is further from the truth and anyone claiming otherwise is lying."
Letter was sent to 'Empire' set days earlier
Before the police made their announcement Wednesday, 20th Century Fox Television, which produces the series "Empire," expressed support for the actor.
"Jussie Smollett continues to be a consummate professional on set and as we have previously stated, he is not being written out of the show," the statement said.
A Fox spokesperson had no comment when reached by CNN on Wednesday.
Seven days before the alleged attack, a letter containing white powder was sent to the Chicago set of "Empire," police have said. Authorities determined the powder to be aspirin, according to Guglielmi.
The image of the letter and envelope, shared with CNN by a person close to Smollett, includes a message apparently cut from magazine clippings, and a stick figure drawing.
Smollett told ABC News the drawing was of a "stick figure hanging from a tree which had a gun pointing towards it." The letter, addressed to Smollett, includes the word "MAGA" on the outside of the envelope in place of the return address.
More than a decade ago, Smollett pleaded no contest to providing false information to law enforcement in a 2007 misdemeanor case, according to Frank Mateljan, a spokesman for the Los Angeles City Attorney's Office.
The case stemmed from a DUI stop in which Smollett gave police the wrong name. He also pleaded no contest to driving with a blood alcohol level over the legal limit and driving without a valid driver's license. He was sentenced to two years of probation and paid a fine.