The equipment was meant for the fight against Boko Haram Islamist militants.
Soldiers have complained that despite the military's huge budget, they were ill-equipped to fight.
Mr Dasuki reacted to the order by saying he had never been invited to appear before the weapon procurement investigative panel, which made the allegations.
He was already under house arrest when the president issued the order for his arrest.
This was as part of an ongoing trial for allegedly possessing illegal firearms.
The court for that trial had ordered for his passport to be released for him to be able to travel to the UK for treatment for suspected prostate cancer.
It was expected that the trial would continue on his return. But the government refused to let him leave the country
.
The BBC's Bashir Sa'ad Abdullahi says soldiers have reported they are better equipped since President Buhari came into office, but the previous president's supporters say this is because those weapons were ordered while Goodluck Jonathan was in power.
A spokesman for Mr Buhari said the corruption resulted in the needless deaths of thousands of Nigerians.
Boko Haram has killed thousands in north-eastern Nigeria in its campaign to create an Islamic state.
In the latest militant attack, at least 32 people were killed by a suicide bomber on a vegetable market in the north-eastern city of Yola on Tuesday night.
This led Facebook to activate its safety check feature for the first time following an attack in Nigeria.
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