Retired Lieutenant General Asad Durrani, who headed Inter Services Intelligence (ISI) from 1990 to 1992, was placed on the Exit Control List (ECL) stopping him from leaving the country, according to the military spokesman.
Durrani has been mired in controversy since last week's release of "The Spy Chronicles: RAW, ISI and the Illusion of Peace". He wrote the book with AS Dulat, who headed the Research and Analysis Wing intelligence agency.
It is based on a series of discussion between the two on various subjects including tense relations with India and Pakistan's alleged interference through proxies in Afghanistan and Kashmir.
The US has long accused the ISI in particular of backing terrorists in Afghanistan, including the Taliban. Islamabad denies the claims.
Criticism of the military, especially its use of proxies in regional conflicts, is seen as taboo in the country. The military is the most powerful institution in Pakistan, ruling the country for roughly half its history and operating largely with impunity.
The book also suggests that the Pakistani authorities may have known about the whereabouts of Osama bin Laden -- an extraordinarily sensitive topic for the military -- and may have later handed over information to the US resulting in the 2011 raid that killed the Al Qaeda chief.
It then announced a court of inquiry into Durrani's alleged misconduct and said he had been placed on the ECL, marking the first instance such controls have been placed on a former spy chief.
The controversy comes weeks after former prime minister Nawaz Sharif sparked a similar firestorm at home and in India by suggesting Pakistani terrorists were behind the 2008 attacks in Mumbai.
The comments made during a newspaper interview resulted in an official condemnation from the country's National Security Council.
Sharif has called on the council to discuss Durrani's book also.
Since being ousted by the Supreme Court last July, he and his supporters have repeatedly suggested they are the victims of a conspiracy driven by the military and the courts to damage their party.
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