The retired judge was taken into custody at Seoul Detention Centre south of the capital.
Yang, who presided over the Supreme Court between 2011 and 2017 and had an outstanding career spanning more than four decades, faces some 40 accusations from the prosecution.
He is accused of using or seeking to use trials as political leverage to lobby the office of former President Park Geun-hye to get her approval for the set-up of a separate appeals court, his pet project.
Another accusation involves Yang delaying deliberations of a suit regarding compensation to a group of South Koreans enslaved by Japan during World War II to curry favour with Park who was seeking good ties with Tokyo.
He is also alleged to have pressured judges to deliver verdicts in Park's favour.
Yang, who has been interrogated three times this month, has denied all charges.
Park was sentenced last April to 24 years in prison for abuse of power and corruption in the scandal of South Korea's "Rasputin" figure Choi Soon-sil.