After pursing Drew Peterson for 1 1/2 years after the disappearance of his fourth wife, Stacy Peterson, authorities in Illinois closed in Thursday, arresting the former Chicago-area police sergeant on two counts of first-degree murder in the drowning death of his third wife.

Peterson — who launched into the national spotlight after Stacy Peterson's suspicious disappearance in October 2007 — is being held on $20 million bond, police and prosecutors said Thursday night at a news conference.

Peterson, 55, hasn't been charged in Stacy Peterson's disappearance. But he now is criminally accused of killing Kathleen Savio, the third wife, who was found at home dead in a dry bathtub on March 1, 2004.

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Will County State's Attorney James Glasgow said at the news conference that a judge granted his request for $20 million bond "without question."

"This is an extremely grave and serious matter, and I think that's reflected in the bond," Glasgow said.

An arraignment is scheduled for 1:30 p.m. CDT Friday in Joliet, Ill.

Glasgow said he intends to introduce evidence at trial that would allow Savio "to testify from the grave" through third-party statements uncovered during the investigation.

A recently passed law, spurred by the Savio and Stacy Peterson cases, would allow the statements to be admitted as an exception to hearsay rules if they are proven in a pre-trial hearing to be reliable, probative and relevant, he said.

"We're very confident in our case," Glasgow said.

Police said the arrest and indictment were the result of 18 months of intensive police work that garnered hundreds of leads and produces thousands of pages of investigative reports.

The search continues for Stacy Peterson, police said.

Drew Peterson is being held at the Will County Adult Detention Facility in Joliet, Ill., under supervision of the Will County Sheriff's office. His children were taken by police and transferred to family services.

Peterson was arrested around 5:30 p.m. Thursday after state police surrounded his car at an intersection near his home in Bollingbroke, Ill. Peterson was alone in his car at the time.

“I guess I should have returned those library books,” Peterson said as he was being taken into state police headquarters, the Herald News reported.

State police later searched Peterson's home.

Andrew Abood, an attorney representing Peterson, released a statement Thursday evening, according to the Chicago Tribune.

"Drew has steadfastly maintain (sic) his innocence regarding the rumor and innuendo that has circulated regarding the unfortunate death of Kathleen. Although he is disappointed with the decision of the state, he looks forward to the opportunity to once and for all prove his innocence in a court of law," he said.

Peterson has been a suspect in the disappearance of his 23-year-old wife Stacy Peterson, who vanished on Oct. 28, 2007, from her Bolingbrook, Ill., home.

In the months following Stacy Peterson's disappearance, Savio's body was exhumed and her 2004 bathtub drowning death was re-classified as a homicide.

Nick Savio, Kathleen's brother, told ABC 7 state police informed his sister Susan that Peterson was arrested on Thursday.

"My sister gave me a call, I just got out of work. She gave me a call and said, you know what, Nick? They are arresting Drew. We didn't know what for. The state police had been telling us the day was coming. We kept hearing it for about eight months. I'm almost in tears here. It's been so hard for our family," he said.

Pam Bosco, spokesperson for Stacy Peterson's family, told ABC 7 that the arrest was long anticipated by the family.

"We have dreamed about it. We have been patient over it. Now that it's here, it's almost a little bit calm," Bosco said.

Martin Glink, the Savio family's attorney, said the family hoped Peterson would be charged.

"We're very happy that the wheels of justice have continued to move and they are pointing in his direction," Glink told ABC 7.

Savio's family filed a wrongful death lawsuit last month, alleging Peterson downed her in the bathtub.

Kathleen Savio's family has long voiced suspicions about the circumstances surrounding her 2004 death, especially following the disappearance of Peterson's fourth wife, Stacy.

For more than a year, Peterson's attorney has said he anticipated the family would file a lawsuit and suggested it was imminent after an appellate court this year upheld a lower court's decision to take control of Savio's estate away from Peterson and give it her father Henry Savio and her sister, Anna Doman.

The lawsuit seeks more than $100,000 and alleges Peterson killed Savio before a scheduled trial over the divorced couple's property.

Many of the allegations made in the lawsuit have been reported in the media ever since Stacy Peterson disappeared in October 2007.

The lawsuit alleges Peterson went to Savio's house on Feb. 28, 2004, to "brutally ... stalk, attack, repeatedly beat, then drown, decedent Kathleen Savio."

Savio survived the attack for an unknown period of time before drowning, the lawsuit says.

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FOXNews.com's Jennifer Lawinski and the Associated Press contributed to this report.