Najib, 73, has been imprisoned since August 2022, when Malaysia's top court upheld his conviction in his first graft trial linked to the multibillion-dollar looting of state investment fund 1MDB.
Malaysia's king in September granted Najib a rare clemency, allowing him to serve the rest of his sentence under house arrest.
The house arrest applies only to his reduced six-year sentence in the first trial.
It does not cover a separate 15-year prison sentence imposed in December 2025 for corruption and money laundering in a second major trial tied to the 1MDB scandal.
Asyraf Wajid Dusuki, secretary-general of the United Malays National Organisation, said the party had collected sufficient funds through its donation drive for Najib.
He said the party had completed payment of the fine at the High Court earlier on Friday, fulfilling a key condition attached to the royal pardon.
The timing of his transfer from prison to house arrest was not immediately clear.
Police were stationed at his house in Kuala Lumpur early on Friday and the road leading to his home was blocked.
Former prime minister Najib set up the 1MDB development fund shortly after he took office in 2009.
Investigators say at least $US4.5 billion ($A6.5 billion) was stolen from the fund and laundered by Najib's associates through layers of bank accounts in the US and other countries.
The funds were allegedly used to finance Hollywood films and extravagant purchases that included hotels, a luxury yacht, art and jewellery.
He was originally sentenced to 12 years in prison and fined 210 million ringgit in 2020 for abuse of power, criminal breach of trust and money laundering involving 42 million ringgit channelled into his bank accounts from SRC International, a former unit of 1MDB.
In January 2024, the Pardons Board halved his sentence to six years and reduced his fine to 50 million ringgit.
King Sultan Ibrahim Iskandar subsequently granted Najib a conditional pardon, paving the way for house arrest until August 23, 2028, provided he paid the fine.
Najib is appealing his conviction and sentence in the second trial.
The 15-year sentence is to take effect after his existing sentence ends.
He was also fined 11.4 billion ringgit.
If Najib fails to win the appeal, he could go back to prison after August 23, 2028.
Public outrage over the 1MDB scandal led to the historic 2018 election defeat of the ruling coalition, which had governed Malaysia since independence from Britain in 1957.
