Former Malaysian prime minister Najib Razak faces 25 new charges over the multi-billion dollar scandal at state fund 1Malaysia Development Berhad (1MDB).

The Kuala Lumpur High Court ruled on Wednesday that prosecutors had established a case for four charges of abuse of power and 21 charges of money laundering for allegedly receiving 2.3 billion ringgit ($797 million) from 1MDB.

He has pleaded not guilty.

If convicted, he faces up to 20 years in prison and fines up to five times the amount of funds involved in the offence.

The 71-year-old was sentenced to 12 years in prison in 2022 after being found guilty of graft in a separate 1MDB-linked case.

The sentence was later halved by a pardons board chaired by Malaysia's king, with Najib set to be released in August 2028.

Malaysian and US investigators say at least $US4.5 billion ($6.9b) was allegedly misappropriated from 1MDB, a state fund founded by Najib in 2009 while he was premier.

Judge Collin Lawrence Sequerah said the charges filed against Najib were valid and correct in law and found all prosecution witnesses to be credible.

Prosecutors had called on 50 witnesses to give evidence, including former central bank governor Zeti Akhtar Aziz, media reported.

Muhammad Shafee Abdullah, who leads Najib's defence team, said the former prime minister was "extremely disappointed" by the ruling but was prepared to take the stand in his own defence.

The defence plans to call on 11 witnesses, he said.

Najib, who was voted out in 2018 after nine years in power, issued a rare apology last week for his role in mishandling the 1MDB scandal.

Najib maintains he had no knowledge of any illegal transfers from the state fund, saying he was misled by others and believed that monies transferred into his personal bank accounts were political donations from the Saudi royal family.

Investigators say more than $US1 billion ($1.5b) of 1MDB funds made its way into Najib's personal accounts, in a globe-spanning scheme that former US attorney-general Jeff Sessions has described as "kleptocracy at its worst".

Najib's apology came just days after Malaysia said it would introduce a law allowing house arrest for some offences.

Najib has been pushing to serve the remainder of his jail sentence at home, and is seeking a court ruling to compel the government to confirm the existence of a royal order that he said accompanied the pardons board's decision and recommended house arrest for him.

The government later denied the proposed law was targeted towards Najib or to help other politicians accused of corruption to escape jail.

Reuters/ABC