Tymoshenko is suspected of "ordering and organizing" the contract-style murder of Yvhen Scherban, his wife and two other people, the Prosecutor General's Office said on its website Friday. Prosecutors say the killing appeared aimed at eliminating a business rival.
The move stops short of formally charging Tymoshenko, but indicates charges are likely. Prosecutors have said for months that she was being investigated in the case. Tymoshenko denies the accusations and says it is part of a broader campaign by her foe, President Viktor Yanukovych, to keep her in prison and bar her from politics.
Tymoshenko is serving a seven-year prison term for abuse of office while negotiating a gas deal with Russia in 2009.
The new case was likely to further spoil Ukraine's ties with Western nations, which have called Tymoshenko's imprisonment politically motivated. The European Union has frozen a key cooperation deal with Ukraine over Tymoshenko's imprisonment.
Tymoshenko's party said a formal announcement of suspicion represented a "shameful day in the history of the Ukrainian law enforcement system."
"Their fear has paralyzed their mind. They are no longer hiding the fact that they want to lock away for life not only the leader of the opposition, but also the whole of Ukraine," the party said in a statement.
The European Court of Human Rights is expected to rule on the Tymoshenko case in the next several weeks, and analysts said the murder case was the government's attempt to keep her in jail during the 2015 presidential campaign if the European court rules in her favor in the gas case.
"It is evident that the Ukrainian authorities are really and seriously intent on keeping Tymoshenko in jail," said Vadim Karasyov, a political analyst with ties to the government, according to the Interfax news agency.
Meanwhile, Tymoshenko's family and allies have expressed concern over the state of her health. Tymoshenko is undergoing hospital treatment for a severe back condition. Her lawyer, Serhiy Vlasenko, said Friday that when he tried to see her recently, she was unresponsive for several minutes. Doctors insisted she was in a satisfactory condition and was under the influence of sedatives.
Tymoshenko's office said Saturday that they have been unable to reach Tymoshenko and inquire about her health since that incident.