Saturday's arrest also came just days after a federal appeals court in NY ordered the unsealing of almost 2,000 pages of records in a since-settled defamation case involving Epstein.
The grand jury returned a single felony solicitation of prostitution charge, and Epstein pleaded not guilty.
The arrest was first reported by the Daily Beast.
Epstein had always been the subject of accusations of paying young girls for sexual massages at his Palm Beach, Florida mansion.
He is scheduled to appear in court Monday.
Criminal defense lawyer Gene Rossi told Law&Crime that it was "extremely bad news" for Epstein that the case was being handled by the Southern District of New York's Public Corruption Unit because "they don't play nice".
The Miami Herald a year ago published a series of stories detailing how the top federal prosecutor in southern Florida at the time, Alexander Acosta, worked with Epstein's lawyers to fashion a lenient plea deal.
Epstein reportedly will be charged with trafficking and conspiracy to traffic minors for sex.at his homes on the Upper East Side of NY and in Palm Beach, Fla.
As a result of his conviction in 2008, Epstein is required to register as a sex offender.
Under the plea deal, the NY billionaire served only 13 months in a Florida jail while accused of molesting more than 100 underage girls-some of them just 14 years old. He served 13 months in county jail and registered as a sex offender. As part of the plea deal, the Federal Bureau of Investigation ended its probe into whether there were more victims and other powerful people who took part.
According to previously unsealed court documents in Florida, authorities say at least 40 underage girls were brought into Epstein's Palm Beach mansion for what turned into sexual encounters after female fixers looked for suitable girls locally and in Eastern Europe and other parts of the world.
"The victims of Epstein's child sex trafficking ring deserve this investigation - and so do the American people and the members of law enforcement who work to put these kinds of monsters behind bars", Sen. Acosta now serves as secretary of labor in the Trump administration.
Under a controversial plea deal reached in 2007 with Alex Acosta, who was the USA attorney in Miami at the time, Epstein pleaded guilty in 2008 to Florida state charges of soliciting prostitution and avoided more serious federal charges relating to allegations of molesting dozens of young girls.
In the new case, additional victims have come forward since Epstein entered into his plea deal with Florida prosecutors, the person said. Earlier this year, a U.S. judge ruled the agreement was a result of a gross violation of federal law by the prosecution, as it deprived the victims of the ability to contest it.
Speculation has been rife that Epstein not only abused the girls himself, but also "loaned" them out to his equally influential and affluent friends, including Prince Andrew and Alan Derschowitz, who both have denied any involvement, as well as Bill Clinton and Donald Trump himself.