Roberto Borge, who governed the touristy state of Quintana Roo from 2010 to 2016, was taken under strict security from the offices of Panama’s national police to an air force base.
Mexican prosecutors accuse Mr. Borge of using funds obtained illegally, embezzlement and abuse of public office.
However, Mr. Borge had denied the allegations.
He was arrested in Panama City in June as he was preparing to board a flight to Paris.
Panama’s foreign ministry said last week that it would send Mr. Borge to Mexico.
For the PRI, the extradition was the latest reminder of corruption scandals as the party tried to rehabilitate its image ahead of presidential election in July.
The PRI, which was trying to keep hold of power as President Enrique Pena Nieto’s term came to an end, had faced a spate of graft allegations.
Four of its former governors including Mr. Borge were arrested on such charges last year in various countries.
In December, Mexican authorities arrested Alejandro Gutierrez, a former high-ranking PRI official in a corruption investigation in the northern state of Chihuahua.
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