The national anti-corruption commission voted unanimously to indict 46-year-old Yingluck on charges of dereliction of duty in overseeing the controversial rice subsidy programme.
The constitutional court ousted Yingluck and nine cabinet members on Wednesday after finding her guilty of abuse of power for the benefit of her powerful family in a 2011 case of transfer of then National Security Council chief Thawil Pliensri.
The controversial rice-pledging scheme for which she was indicted saw farmers selling rice to the government for more than the market value. The scheme proved to be costly and the government was unable to pay the farmers.
Yingluck was accused of negligence linked to the rice scheme with her political foes alleging the scheme drained Thai finances, damaged the country's rice producing industry and fostered massive corruption.
"The commission considers there is enough evidence to indict (Yingluck) and refers (the case) to the senate," Panthep Klanarongran, chief of the national anti-corruption commission told reporters.
The case will now be voted on at the senate. If impeached, Yingluck will be barred from politics for five years.
"The NACC had submitted letters to warn the defendant twice that the project would create problems and incur great losses, as well as allow corruption to take place throughout every step of the scheme," Commissioner Vicha Mahakun told reporters.
"Yet the defendant did not consider suspending the project as soon as she learned about the country's great losses from running the project," Mahakun said.
Both the rulings are a huge blow to the pro-government "Red Shirt" movement. However, the anti-government People's Democratic Reform Committee welcomed the developments with protesters who were demanding Yingluck's resignation organising a march through the main Sukhumvit road today.
Yingluck, Thailand's first woman premier, had been in office for two years, nine months and two days since her Pheu Thai Party won the 2011 election.
Her attempt through an amnesty bill to engineer a pardon for Thaksin, who was sentenced to prison, sparked a series of mass protests in Bangkok led by the PDRC.
About 25 people have been killed and hundreds others wounded in political violence in six months of protests.
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