According to the presidency, Dasuki had "awarded fictitious and phantom contracts" worth around $2 billion for jets, helicopters and ammunition for the army to fight the jihadist Boko Haram group which were never delivered.
Under Buhari's predecessor Goodluck Jonathan, when Dasuki was in office, Boko Haram took control of parts of Nigeria's northeast where it is trying to carve out an Islamic state.
"Had the funds siphoned been properly used for the purpose they were meant for, thousands of needless Nigerian deaths would have been avoided," the presidency said late on Tuesday.
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