DeLay dismissed the charges in a statement, saying that the prosecutor in charge of the investigation, Travis County District Attorney Ronald Earle, was pursuing a political vendetta. He added Earle, a Democrat, was seeking revenge for political victories DeLay had helped win for Republicans in Texas.
DeLay further asserted his "categorical and absolute" innocence.
"I have done nothing wrong," DeLay said. "I have violated no law, no regulation, no rule of the House. I have done nothing unlawful, unethical, or unprecedented, even in the campaigns of Mr. Earle himself."
DeLay said the indictment is "one of the weakest, most baseless indictments in American history. It is a sham, and Mr. Earle knows it."
In a press conference in Austin, Texas, Earle said that the grand jury had issued the indictment based on the evidence.
"My job is to prosecute felonies. I'm doing my job," Earle said.
The conspiracy charge carries a potential sentence of up to two years in jail. Under House ethics rules DeLay must relinquish his post in the House leadership where he serves as the second in command. Republicans repealed the rule in November but reinstated it in January after heavy criticism that the move was aimed at protecting DeLay.
"I have notified the speaker that I will temporarily step aside from my position as majority leader pursuant to rules of the House Republican Conference and the actions of the Travis County district attorney today," DeLay said.
Republicans chose Rep. Roy Blunt, R-Mo., No. 3 in the leadership ranks, to temporarily fill the majority leader position.
DeLay's attorney Steve Brittain said DeLay was indicted along with John Colyandro, former executive director of a Texas political action committee formed by DeLay, and Jim Ellis, who heads DeLay's national political committee.
The grand jury issued the indictment on the last day before its term expired.
The district attorney's investigation has centered on DeLay's successful 2002-3 effort to win a majority for Republicans in the Texas Legislature and to get more Texas Republicans elected to Congress.
A political action committee DeLay created, Texans for Republican Majority, was indicted earlier in September and charged with making illegal corporate contributions to legislative campaigns. Under Texas law, corporate contributions cannot be used to advocate the election or defeat of a candidate. They can be used for administrative costs.
The indictment of DeLay, Colyandro and Ellis apparently focuses on campaign contributions made from the Texas political action committee to the Republican National Committee, along with instructions that the RNC in turn send money to Republican candidates for seats in the Texas Legislature.
The indictment alleges that DeLay and his associates conspired to have the political action committee receive original donations from multiple corporations, route them through the RNC, and then send them back to candidates in Texas, a plan the indictment says violated Texas law and resulted in a "prohibited political contribution by a corporation."
The indictment said a check was sent from the political action committee to the RNC in the amount of $190,000, along with a document that outlined specific amounts of money to be sent to listed Republican candidates.
After Republicans won a majority in the Texas legislature in 2002, DeLay supported a controversial redistricting plan that may have helped Republicans win six more seats in the U.S. House of Representatives. Democratic state legislators unsuccessfully sought to filibuster the passage of the redistricting plan, which they said was unfair, and some went into hiding in order to avoid an order to appear at the state capitol to vote on the bill.
White House spokesman Scott McClellan said Wednesday that DeLay was a "good ally" and that President Bush considers him a friend.
"The president's view is that we need to let the legal process work," McClellan said.
DeLay represents Texas' 22nd congressional district, suburbs southwest of Houston. Last year, DeLay was issued warnings on three separate charges brought before the House ethics committee. The charges dealt with campaign financing, corporate influence and abuse of power. DeLay vehemently denied the charges.