Illsley is accused of three counts of false accounting and will appear at City of Westminster magistrates' court on 17 June.
It is alleged that he falsely claimed more than £20,000 over three years for expenses on his second home in London.
The director of public prosecutions, Keir Starmer QC, said that there was "sufficient evidence" to charge the MP, adding that it was "in the public interest to bring criminal charges".
Starmer said: "Mr Illsley faces three charges under section 17 of the Theft Act 1968 for false accounting.
"The first charge alleges that Mr Illsley dishonestly claimed expenses in relation to council tax, service and maintenance charges, repairs and insurance charges, and utilities and communications charges for his second home in Renfrew Road, London, between May 2005 and April 2006.
"The second charge relates to the same claims between May 2006 and April 2007, and the third charge relates to the same claims between May 2007 and April 2008.
"In total the charges allege a sum in excess of £20,000 was dishonestly claimed over this three-year period."
In May last year, the DPP and the Metropolitan police commissioner, Sir Paul Stephenson, agreed to set up a panel of senior police officers and senior prosecuting lawyers to assess a number of complaints made to the Met over parliamentary expense claims.
The Crown Prosecution Service said that eight files had so far been submitted for a charging decision. Five of those – including Illsley's case – have resulted in charges being brought. The CPS decided to take no further action in two cases; one more is still under consideration.
In March, three Labour MPs and a Conservative peer – Elliot Morley, David Chaytor, Jim Devine and Lord Hanningfield – appeared at City of Westminster magistrates court to plead not guilty to charges of false accounting under the Theft Act 1968.
The cases were committed to Southwark crown court after lawyers argued they raised issues of "high constitutional importance".
If convicted, the politicians face a maximum sentence of seven years' imprisonment.
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