The Economic Offences Wing of the Uttar Pradesh police will investigate the case against Samajwadi Party general secretary Amar Singh, who has been accused in a Rs 500-crore scam.
The Uttar Pradesh government decided this late on Tuesday night, a spokesman of the state home department said.
The Kanpur police station, where the case was initially registered, has been asked to hand over all files related to the case to the EOW.
The case was filed by local lawyer Shiv Kant Tripathi who has charged Singh of using illegal means in merging a number of his companies and of artificially raising the premium of shares of these companies.
Singh has however denied the allegations and that the case was a part of "political vendetta masterminded by UP Chief Minister Mayawati".
The UP government had earlier passed on the first information report to the Kolkata police pleading that the companies referred to were based there.
However, the Kolkata police returned the FIR with the remark that the UP police was free to initiate action in the matter, as the Kolkata address of the companies did not bar the UP police from proceeding with the case.