The Electoral Commission has confirmed it is investigating money paid by Mid and East Antrim Council for a table at an event hosted by Ian Paisley.
Last September, the North Antrim MP hosted the event at the Tullyglass Hotel in Ballymena.
Questions have been raised about a £1,500 payment made by Mid and East Antrim Council to sponsor a table at the event, with both the Council and Ian Paisley saying the money went directly to the hotel.
In a statement on Wednesday, the Electoral Commission said it had "opened an investigation into the donation from Mid and East Antrim Council to Ian Paisley MP".
"We can’t go into further detail as this is now a live investigation," it added.
Environment Secretary Michael Gove was the guest speaker at the event.
Sinn Fein Mid and East Antrim Councillor Patrice Hardy welcomed the investigation.
"I very much welcome today’s confirmation that a formal probe has now been launched," she said.
“The ratepayers have a right to know whether the DUP benefited financially from the council’s money, and if so, what is going to be done about it."
Last month Northern Ireland's local government auditor confirmed it would review the Council's payment.
In a statement, the Northern Ireland Audit Office said it was "aware of that particular issue" and will "specifically review that transaction as part of our audit procedures when we come to review the accounts".
Mid and East Antrim Council has previously said the decision to purchase the table was made by council members, and the event was attended by representative from various parties and representatives from the agri-food sector.
A Council spokesperson said: "Council paid The Tullyglass Hotel via electronic payment. No money was exchanged between Council and the DUP. Council will fully co-operate with any investigation."
The event last September was sponsored by by Belfast International Airport, which also sponsored the DUP's annual North Antrim constituency dinner in February, where former Conservative minister Priti Patel was interviewed by Ian Paisley about Brexit.
Figures for donations released by the Electoral Commission on Wednesday show Belfast International Airport was the highest sponsor in the first quarter of 2018, having paid £4,000 to the DUP.
After questions were raised about sponsorship by the airport in February, a spokesperson said: "Belfast International Airport is a privately owned company and doesn’t receive Government subsidies or assistance.
"We support all our political parties where it is clear the events they organise, or are a part of, are to the benefit of the airport."
The DUP has been contacted for comment.