Borys Herman, the man suspected of overseeing a plot to assassinate journalist Arkady Babchenko, has been remanded in custody by a Kyiv court.
Herman is alleged to have promised $40,000 to a would-be assassin for the killing of Babchenko.
Ukraine's Security Service (SBU) says it thwarted the planned killing by working together with Babchenko to fake his death.
The SBU faked Babchenko's death on May 29, saying this contributed to thwarting an assassination plot allegedly organized by Russia's secret services.
Babchenko earlier said that Herman had paid out for the assassination once the news of the "killing" had been made public.
Prosecutor-General Yuriy Lutsenko, meanwhile, told Ukrainian TV channel Inter that Herman hired Oleksiy Tsymbalyuk, a man who had fought in the conflict in eastern Ukraine, to kill Babchenko, Interfax has reported.
Lutsenko previously said the person who was supposed to kill Babchenko cooperated with the investigation and will be treated as a witness in the criminal case.
"Herman contacted Tsymbalyuk so that he would murder Babchenko," Lutsenko told Inter. "After that, Tsymbalyuk went to the SBU and joined an operative game to expose the organizer -- Herman, according to our theory. A number of other SBU agents assisted with the operation."
According to Lutsenko, Herman met with Tsymbalyuk several times and at one of their meetings gave him $20,000 as a 50 percent down payment for the journalist's murder, and promised the remainder would be paid after the killing.
Asked who knew about the Babchenko operation, Lutsenko said, "No more than 10 people in the Ukrainian law enforcement system knew about all this."
Herman claims that he had no intention of killing Babchenko and actually collaborated with Ukraine's counterintelligence service.
Herman's lawyer, Yevhen Solodko, said Herman was the director of a Ukrainian-German arms manufacturer called Schmeisser -- describing the firm as the only nonstate arms production enterprise in Ukraine.
Solodko also claimed that Herman had actively supported Ukrainian military forces in their fight against Russia-backed separatists in the eastern Donbas region.
He said Herman's weapons firm had a long-standing business relationship with the Ukrainian Defense Ministry.
Meanwhile, Russia condemned Babchenko's staged assassination and demanded action by international rights organizations.
"Using a journalist to mislead the public casts a shadow over the entire journalistic community and undermines trust in the media," the Kremlin's human rights council said in a June 1 statement.
It was an "inhuman dramatization of his own murder," the Kremlin said, calling on the Organization for Security and Cooperation in Europe (OSCE) and the Council of Europe to use their power to "influence the Ukrainian authorities for the purpose of normalizing the atmosphere for media in the country."