Vatican Bank's chairman Ettore Gotti Tedeschi, who is known to the Pontiff, and director general Paolo Cipriani - are being investigated.
The probe was launched after tax police in Rome were alerted to two suspicious transactions totaling £19million.
It is not the first time the bank, known as the Istituto per le Opere Religiose, has been implicated in money laundering - it was previously linked to the £2billion collapse of another bank, Credito Ambrosiano.
Then governor Archbishop Paul Marcinkus escaped investigation by claiming Vatican immunity but Ambrosiano's president Roberto Calvi was found hanging under The City of London's Blackfriars Bridge after escaping from the Mafia in Italy.
Calvi was known as God's Banker because of his connections to the Vatican Bank.
Archbishop Marcinkus died in 2006, never explaining his involvement with Calvi.
### He famously once said: 'You can't run the Church on Hail Mary's.'