Dunedin police say an investigation into suspected fraud by an Otago University financial manager is at an early stage.
The university laid a formal complaint against the manager on Thursday.
Radio New Zealand News understands the manager from Otago University's financial services division allegedly stole between $200,000 and $300,000 over several years.
The missing money was identified during an internal checking process about a month ago.
The manager was escorted from the premises by security guards.
Detective Senior Sergeant Kallum Croudis says police only started work on the case on Thursday, and he could not confirm what information the university had passed on when laying its complaint.
The case involving public funds is serious enough for the university's governing council to be informed, as well as its main funder, the Tertiary Education Commission, and its Minister, Steven Joyce.
The commission says the matter is an operational one, and Otago University is an autonomous organisation.