Texas Gov. Rick Perry was indicted Friday for allegedly abusing his veto power during a dispute with a public corruption prosecutor over her drunken driving arrest -- in a case that could mar the potential 2016 presidential candidate’s political prospects.

Perry, who ran unsuccessfully for the Republican presidential nomination in 2012, is the first Texas governor to be indicted in nearly a century.

CLICK TO READ THE INDICTMENT.

The indictment came down late Friday, after a special prosecutor spent months calling witnesses and presenting evidence that Perry broke the law when he threatened to veto $7.5 million over two years for the public integrity unit, which is run by Travis County District Attorney Rosemary Lehmberg's office.

The governor wanted Lehmberg, a Democrat, to resign after she was arrested and pleaded guilty to drunken driving in April 2013. When she refused, Perry vetoed the money.

Mary Anne Wiley, general counsel for Perry, said in a statement Friday evening that the governor's actions were allowed under the law.

“The veto in question was made in accordance with the veto authority afforded to every governor under the Texas Constitution," she said. "We will continue to aggressively defend the governor's lawful and constitutional action, and believe we will ultimately prevail.”

Perry's defense attorney David L. Botsford, whose $450-per hour fees are being paid for by state funds, said he was "outraged and appalled" at the decision.

"This clearly represents political abuse of the court system and there is no legal basis in this decision," he said in a statement.

CLICK TO READ THE FULL STATEMENT FROM PERRY'S ATTORNEY.

Several top aides to Perry appeared before grand jurors in Austin, including his deputy chief of staff, legislative director and general counsel. Perry himself wasn't called to testify.

Perry was indicted by an Austin grand jury on felony counts of abuse of official capacity and coercion of a public servant. Maximum punishment on the first charge is five to 99 years in prison, and two to 10 years on the second.

The Texas Democratic Party called on Perry to resign after the indictment was announced, calling the situation "unbecoming" of a Texas governor.

"Governor Rick Perry has brought dishonor to his office, his family and the state of Texas. Texans deserve to have leaders that stand up for what is right and work to help families across Texas," Texas Democratic Party Chairman Gilberto Hinojosa said in a statement.

The dramatic development comes toward the end of Perry’s final term in office. In office since 2000 and already the longest-serving governor in Texas history, Perry isn't seeking re-election in November. But he was thought to be weighing a possible presidential run in 2016.

"I took into account the fact that we're talking about a governor of a state — and a governor of the state of Texas, which we all love," said Michael McCrum, the San Antonio-based special prosecutor. "Obviously that carries a lot of importance. But when it gets down to it, the law is the law."

McCrum said he'll meet with Perry's attorney Monday to discuss when he will come to the courthouse to be arraigned. McCrum said he doesn't know when Perry will be booked.

Accusations have flown on both sides in the legal showdown.

Perry originally said Lehmberg, who is based in Austin, should resign after her arrest. A video recording made at the jail showed Lehmberg shouting at staffers to call the sheriff, kicking the door of her cell and sticking her tongue out. Lehmberg faced pressure from other high-profile Republicans in addition to Perry to give up her post. Her blood-alcohol level was nearly three times the legal limit for driving.

Lehmberg served about half of her 45-day jail sentence but stayed in office, despite Perry's assertions that her behavior was inappropriate. The jail video led to an investigation of Lehmberg by a separate grand jury, which decided she should not be removed for official misconduct.

Her office is the same office that indicted U.S. Rep. Tom Delay as part of a finance probe.

No one disputes that Perry is allowed to veto measures approved by the Legislature, including part or all of the state budget.

However, the left-leaning Texans for Public Justice government watchdog group filed an ethics complaint accusing the governor of coercion since he threatened to use his veto before actually doing so in an attempt to pressure Lehmberg to quit.

Lehmberg oversees the office's public integrity unit, which investigates statewide allegations of corruption and political wrongdoing. Perry said he wouldn't allow Texas to fund the unit while Lehmberg remained in charge. He used his line-item veto power to remove funding for the unit from the Texas budget.

Perry and his aides say he didn't break any laws.

"The veto in question was made in accordance with the veto power afforded to every governor under the Texas Constitution, and we remain ready and willing to assist with this inquiry," spokeswoman Lucy Nashed said in April, after the grand jury was convened in the case.

The indictment is the first of its kind since 1917, when James "Pa" Ferguson was indicted on charges stemming from his veto of state funding to the University of Texas in an effort to unseat faculty and staff members he objected to. Ferguson was eventually impeached, then resigned before being convicted -- allowing his wife, Miriam "Ma" Ferguson, to take over the governorship.

The Associated Press contributed to this report.