Five Kenyans including an ex-spy chief, an ex-central bank governor and a businessman are to be charged with fraud over the $600m Goldenberg affair.
Pattni told an inquiry he handed suitcases of money over to Moi
A report on the scam, in which millions of dollars were paid for non-existent exports of gold and diamonds, was given to President Mwai Kibaki last month.
Those named by Attorney General Amos Wako include Kamlesh Pattni, alleged mastermind of Kenya's biggest fraud.
Kenya's ex-vice-president who was named in the report cannot be prosecuted.
George Saitoti served as finance minister as well as vice-president under President Daniel arap Moi during the time the Goldenberg affair took place.
He resigned as education minister last month after being named in the report over his alleged links to the scam, which is thought to have cost Kenya as much as $600m between 1990 and 1993.
The attorney general is recommending that the country's chief justice consider overturning a previous court order exempting Mr Saitoti from prosecution, a BBC reporter in Nairobi says.
Those charged are:
- businessman Kamlesh Pattni
- ex-intelligence head James Kanyotu,
- ex-treasury permanent secretary Wilfred Karunga Koinange
- ex-central bank governor Eric Kotut,
- ex-deputy central bank governor Eliphaz Riungu
The report, which followed a major inquiry, says that former President Moi could not have been "completely unaware" of the scam and also says Mr Saitoti should face criminal charges, according to sources who have seen it.
Both men have repeatedly denied the allegations against them.
Mr Pattni, a major shareholder of export firm Goldenberg International, alleged during his testimony to an inquiry that he "never visited Moi empty handed".
He claimed he gave money-filled suitcases to Mr Moi.
Mr Kibaki was elected in 2002 on a pledge to fight the corruption which had characterised Mr Moi's administration.
Mr Saitoti and two of Mr Moi's sons are among 20 leading figures who were ordered to surrender their passports and weapons last month.
Mr Saitoti resigned as education minister in Mr Kibaki's administration last month.
Mr Kibaki's government is mired in its own corruption scandal - the Anglo Leasing affair - which has led to the resignations of several ministers and led to the suspension of aid.
The BBC's Karen Allen in Nairobi says that although the charges in the Goldenberg scandal have been long awaited, the timing will be interpreted by some as a means of diverting attention away from the current government's own troubles.