"Investigators revealed that Vladimir Nikolayev personally signed a contract to hire armed bodyguards in September 2004 without being authorized to do so," the press service of the Prosecutor's Office said.
He also illegally signed a contract for similar services to protect the city administration property in September 2005.
The press office said both contracts, totaling 4.4 million rubles ($168,000), were funded from the city budget.
Nikolayev, who did not appear in court, is also said to have illicitly used traffic police escort services, which cost the budget 600,000 rubles ($23,000) in 2006 alone.
According to investigators, Nokolayev's spending on his personal body guard amounted to almost one million rubles ($38,000) last year.
It has also been established that 950,000 rubles ($36,000) was spent on a charter flight to take Nikolayev, his family and his two deputies with their wives to Seoul on a New Year vacation.
Yury Koren, first deputy mayor, will take on his boss's functions, the city administration said.
The mayor, who has a criminal record for murder threats and grievous bodily harm, and is said to have been related to criminal groups before his political career, denied the allegations in his address to Vladivostok residents Tuesday, saying charges had been laid against him as a pretext to discredit the city authorities' policy in a bid to redistribute municipal property and spheres of influence in the city.
Prosecutors earlier launched a criminal case against several officials from the Vladivostok city administration, including Nikolayev, who have been allegedly involved in illegal land sales.
Police Monday searched the offices of the city administration and seized a number of files and documents.
A criminal probe has been launched against Nikolayev's deputy Igor Golubev, who is suspected of misappropriating budget funds on a large scale.
Prosecutors said Golubev had ordered on behalf of the Vladivostok administration to transfer 20 million rubles ($765,000) to a company for sporting arrangements, which had not been planned in the budget.
Russia's Interior Minister Rashid Nurgaliyev highlighted on February 9 his ministry's success in tackling economic and financial crimes in Russia, which witnessed a series of high-profile corruption and money laundering cases in 2006.
The anti-corruption campaign in the country has resulted in the instigation of about 600 bribery and embezzlement cases since July, when President Vladimir Putin set the fight against corruption as a national priority and ordered the new prosecutor general, Yury Chaika, to draw up an anti-corruption strategy.
First Deputy Prosecutor General Alexander Buksman said last November that corruption in Russia had reached an annual figure of $240 billion, a sum almost equal to the federal budget.
