Guns, munitions and a machete were recovered in the swoop launched on the basis of indications of a “possible concrete impending terrorist attack” by suspected Salafists – ultra-conservative Islamists – mostly in the university town of Goettingen.
No concrete plans of a targeted attack or evidence of links to Islamic State (ISIS) had been recovered.
Goettingen police chief Uwe Luehrig told a news conference: “We came to the conclusion that there was an imminent danger that had to be averted.”
Both of the arrested men were born in Germany and were neither refugees nor seeking asylum, according to officials.
The unnamed pair were a 27-year-old man of Algerian descent and a 23-year-old with links to Nigeria.
Talking about the raids, Luehrig added: “It was quite clearly a dangerous situation.
“They had weapons and munitions. They could have staged the attack at any moment.”
Germany’s BND foreign intelligence agency was one of several security agencies that collaborated in the raids, he said.
The Federal Prosecutor’s office also said that it had earlier this month charged three Syrian men, aged 18, 19 and 26, on suspicion of being members of ISIS.
It is claimed the three were radicalised in the Syrian city of Raqqa.
The Prosecutor’s office said the trio were sent by the militant group with the possible goal of carrying out an attack in Germany.
They had applied for asylum upon arrival in 2015 and were arrested in September last year.
Germany has been on high alert and there have been numerous police raids, especially since an ISIS-inspired attack by a Tunisian refugee on a Christmas market in Berlin that killed 12 people in December.
On Wednesday, a 36-year-old Tunisian asylum seeker was arrested on suspicion of planning an Islamist attack.
He was also wanted in his homeland over the deadly 2015 attack on the Bardo Museum in Tunis.