The special cell of the Delhi police arrested Sreesanth from his friend's place in Mumbai while the other two cricketers were arrested last night from the team hotel at Nariman Point for their alleged role in spot fixing.
The arrest took place immediately after the players returned to their team hotel, following their match against Mumbai Indians at Wankhede stadium. The hosts won by 14 runs.
The Delhi police source said that these players were under the scanner for their role in spot fixing in some of the earlier IPL match although they did not elaborate which matches were under scrutiny.
The police have also arrested seven bookies in Mumbai and three bookies in Delhi in connection with the same case. They are looking for two more bookies in Delhi.
The development comes as a shock for the IPL authorities who have time and again grappled with controversies and scandals ever since the league was launched in 2008.
IPL Chairman Rajiv Shukla said he was awaiting details on the incident.
Rajasthan Royals CEO Raghu Iyer said that the three players were picked up by Delhi police last night and the team management was co-operating with the investigation.
"Rajasthan Royals has zero tolerance for corruption and we will take action, if charges are proved," he said.