The Immigration Department, which had initially said there was no travel blacklist for Najib, issued a brief statement that Najib and Rosmah "have just been blacklisted from leaving the country".
The senior police officer only confirmed "family members" of Najib had stayed in the apartment complex when Reuters asked if Rosmah had stayed there.
United States investigators said Mr Najib's associates stole and looted 4.5 billion U.S. dollars from the fund, of which some 700 million USA dollars landed in Mr Najib's bank account and some 30 million United States dollars was used to buy jewellery for his wife.
It's a stunning turn of events for Najib, who has long denied any wrongdoing and aggressively hit back at detractors after 2015 revelations that around $700 million - alleged to be 1MDB funds - appeared in his personal accounts before the prior election in 2013.
In a series of early morning tweets, Najib said: "I will take a short break to spend time with my family whom I have not seen enough of in recent years". The prime minister also announced a home affairs minister and a defence minister to take the number in his Cabinet to five.
"I have taken the decision to step down as president of UMNO and chairman of Barisan Nasional immediately", Najib told a press conference on Saturday. The announcement came after strong calls emerged from the UMNO, the linchpin of the coalition, for Najib to resign.More news: 9 killed in multiple blasts in Jalalabad attack
With the Najib administration's defeat in the 14th general election (GE14), many believed the Rahman prophecy was fulfilled.
An opposition alliance headed by new Prime Minister Mahathir Mohamad, 92, inflicted a shock defeat on BN in Wednesday's election, ejecting the coalition from power after more than six decades of unbroken rule.
Mr Anwar, a former deputy prime minister, is serving a prison term for the politically-motivated charge of sodomy.
Bridget Welsh, a Southeast Asia expert at John Cabot University in Rome, said it was hugely ironic that Mahathir, who damaged Malaysia's democratic institutions with his strong-arm rule, has returned as its political savior.
Also Saturday, Mahathir appointed Lim Guan Eng, an ethnic Chinese, as finance minister, the first member of an ethnic minority group to be appointed to the powerful post in 44 years.
Mahathir was sworn in on Thursday night by the king, Malaysia's constitutional ruler, following a momentous vote in which scandal-plagued Najib was soundly beaten at the polls by his former mentor.
Mahathir announced the appointments after a meeting attended by key PH leaders.