Prosecutors have stated that they were given the counterfeit documents when the 39-year-old and his brother, Roberto Assis, landed in the capital, Asuncion, on Wednesday.
The two men were initially detained in the Resort Yacht & Golf Club Paraguayo, as confirmed by the Ministry of Interior of Paraguay.
Ronaldinho was planning to take a flight back to Rio de Janeiro in Brazil, but he and Roberto were officially taken into custody on Friday.
The ministry released a statement via Twitter confirming their arrest which reads: "The Attorney General's office issued a warrant for their arrest, charged the player Ronaldinho with using a public document with false content and requested preventative detention."
Hours after a judge refused to ratify a prosecutor's proposal for an alternative punishment, the pair were taken to a police station in Asuncion.
The head of the investigations unit of the Paraguayan police, Gilberto Fleitas, confirmed the news, with Ronaldinho later seen on television being transported away from the Sheraton hotel.
Fleitas told Reuters: "The detention order has been carried out."
Ronaldinho and his brother have both denied any wrongdoing, insisting they believed the passports were a courtesy gesture.
They are expected to face a judge on Saturday, with a decision on whether they will be set free or kept behind bars set to be made while investigations continue.
The former Barcelona superstar and his representatives had been invited to Paraguay by Nelson Belotti, owner of the Il Palazzo casino, and was due to appear at a number of publicity events.
Ronaldinho's lawyer Sergio Queiroz has said that his legal team has filed an injunction to release the World Cup winner and his brother, who also acts as his business manager.
Widely considered to be one of the greatest footballers of all time, Ronaldinho enjoyed a hugely successful playing career spanning 17 years.