Conservative candidate Francois Fillon faces investigation by France's financial prosecutors over jobs he gave to his wife and two of his children, pushing the case to a higher and riskier level for the man hoping to become the next president of France.
The announcement came as Mr Fillon was holding a rally outside Paris.
The conservative candidate was once the frontrunner in polls, but his ratings slipped with the probe into payments to family members that totalled more than one million euro over many years.
After a preliminary investigation opened on January 25, the financial prosecutor's office decided to escalate and enlarge the case, turning it over to investigating judges who can bring charges or throw the case out.
Critically, however, no one was named in the judicial investigation on a list of charges, including misappropriation of public funds, abuse of public funds and influence trafficking.
It was a sign that the prosecutor's office intends to question others, enlarging the circle of those who risk being charged and adding new investigators, an official in the prosecutor's office said, refusing to state how many people are concerned.
Mr Fillon has denied any wrongdoing and vowed to carry on his campaign amid the probe.
He said at one point that he would end his presidential bid if charged.
France's already unpredictable presidential campaign plunged into uncertainty when the national financial prosecutor's office opened its preliminary investigation last month based on reports by the weekly Le Canard Enchaine about the parliamentary jobs.
The decision to move forward and expand the investigation risked casting new doubt on the viability of Mr Fillon's candidacy.
The investigation tarnished the clean-hands image of Mr Fillon, a former prime minister, and he has been greeted at some campaign stops with protesters clanging pots and pans.
Far-right leader Marine Le Pen, who has been topping polls, is embroiled in her own corruption scandals, including one involving parliamentary aides, but her candidacy has not suffered.
However, Mr Fillon's lawyers put an upbeat spin on the development.
They called the move "logical", saying in a statement that it shows that the financial prosecutor's office "was unable to show the reality of the infractions".
"We don't doubt that at the end of a calm procedure, with independent judges, the innocence of Francois and Penelope Fillon will at last be recognised," the statement said.
Mr Fillon's lawyers, Antonin Levy and Pierre Cornut Gentille, had argued from the start that the financial prosecutors had no legal competence in the case.
They now have access to the files.
Mr Fillon admits that he hired his wife and children as parliamentary aides, a practice that is legal in France.
However, there are suspicions that neither his wife Penelope, who is originally from Wales, nor a son and daughter actually worked for the pay.
The announcement came in the midst of a Fillon campaign rally Friday in Maisons-Alfort, outside Paris.
"If I am attacked, so relentlessly attacked, it is because I clash with the spineless consensus that only likes the right when it walks in the shadows," Mr Fillon told the crowd, suggesting that his legal troubles were part of a bid to bring him down.
The statement by prosecutors attributed the decision to open a judicial investigation in part to the long time period covered in the case.
Since the scandal erupted, centrist presidential candidate Emmanuel Macron and Ms Le Pen, the far-right leader, have moved ahead of Mr Fillon in the polls for France's two-round, April 23-May 7 presidential election.
Ms Le Pen is embroiled in two financial probes, one concerning a financing scheme for her National Front party and the other linked to aides in the European Parliament.
Her chief of staff, Catherine Grisset, was handed preliminary charges of breach of trust after being questioned on Wednesday.
Ms Le Pen refused to appear for questioning before an investigating judge, receiving reprimands from Socialist prime minister Bernard Cazeneuve and political opponents on the right.
Her bodyguard, who once served as her aide for several months, was questioned and released.