Earlier this month, the 48-year-old scion of the Lee family was arrested for his alleged role in a corruption scandal in South Korea, which was part of a series of events that led to the impeachment of President Park Geun-hye in parliament late last year.
On Feb. 17, Lee was taken into custody and held at the Seoul detention center. The following day he was handcuffed and tied with white rope as he was taken for questioning by South Korean authorities.
The special prosecutor's office accused Lee of bribing a close friend of the president to gain government favors for the conglomerate.
Lee and Samsung have both denied any wrongdoing. The official stance remains: Samsung admitted to giving money to foundations at the center of a corruption scandal involving President Park, but the company maintains it received nothing in return.
Following the news from the prosecutor's office, Samsung said it would dismantle its corporate strategy office, which handled key decisions for the conglomerate. It also said that top executives including Vice Chairman Choi Gee-sung and President Chang Choong-ki had resigned.
While experts have said Lee's arrest will not likely affect the Samsung brand's global standing, others have pointed out that this could cast fresh light on the future of large family-run conglomerates in South Korea, informally known as chaebols.
Samsung Group shares finished mixed on Tuesday following the news. Shares of Samsung Electronics rose 1 percent, Samsung SDI advanced 1.6 percent and Samsung Engineering gained 2.1 percent. But shares of Samsung C&T fell 1.6 percent.
Samsung did not immediately respond to CNBC's emailed request for comments on the decision.
— CNBC's Chery Kang contributed to this report.