Federal prosecutors are poised to launch one of the largest asset seizures in U.S. history as they step up their investigation into billions of dollars siphoned away from a Malaysian government investment fund, according to people familiar with the matter.

Authorities are expected to file civil lawsuits as soon as Wednesday morning seeking to seize more than $1 billion worth of assets, which are expected to include properties and other assets purchased with money allegedly misappropriated from the Malaysian fund, according...