Monsignor Nunzio Scarano's lawyer had asked for his client to be granted house arrest.
Scarono a Vatican accountant, was arrested last Friday together with Italian secret service agent, Giovanni Maria Zito, and a financial broker, Giovanni Carenzio.
All three suspects are accused off attempting to smuggle the cash to Italy from Switzerland on a private jet.
Scarano allegedly paid a 400,000 euro bribe in the cash-smuggling case. His lawyer said he did not dispute the facts of the bribery investigation but claimed he was merely "trying to help out some friends".
Scarono has also been targeted by a separate probe investigating a series of suspicious transactions involving the recycling of cheques described as church donations through the Vatican Bank - a lender long-tainted by accusations of money-laundering.
He has denied wrongdoing in that case.
He was suspended in May from his post within the Administration of the Patrimony of the Apostolic See (Apsa) , the body that manages the Vatican's portfolio of assets including its real estate.