Mr García is accused of taking bribes from Brazilian construction company Odebrecht - claims he has repeatedly denied.
Officers had been sent to arrest him in connection with the allegations.
Interior Minister Carlos Morán told reporters that when police arrived, Mr Garcia asked to make a phone call and went into a room and closed the door.
Minutes later, a shot rang out, Mr Morán said. Police forced the door open and found Mr Garcia sitting on a chair with a bullet wound to his head.
Health minister Zulema Tomás said Mr García's condition was "very serious and critical", and that he had to be resuscitated after suffering three cardiac arrests.
"Let's pray to God to give him strength," the former president's lawyer Erasmo Reyna reportedly told journalists at the hospital.
Mr García served as president from 1985 to 1990 and again from 2006 to 2011.
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