Nairobi Governor Mike Sonko has suspended construction of a Sh9.6 billion tower by Chinese firm AVIC.
The building is located along Waiyaki Way next to Villa Rosa Kempinski hotel in Westlands.
It is alleged that the contractors encroached on public land.
At least 15 individuals were arrested at the site and are scheduled to be arraigned in court at 2 pm on Thursday.
Upon completion, the building was expected to have a 43-floor office block and four apartment blocks as well as a five-star hotel to be occupied by US chain Marriot Hotels.
It was also meant to serve as AVIC's Africa headquarters.