The "Real IRA" would have made over €1 million if it had succeeded in selling the 5.5 million smuggled cigarettes that were seized by gardaí and Dutch police in two operations since the weekend.
The street value of the contraband is just under €1.6 million, while the loss to the Exchequer would be some €1.25 million.
Gardaí believe they have dealt a serious blow to the dissidents who relied on smuggled cigarettes to fund their activities.
One of the two men detained on Saturday by the Dutch customs authorities at a warehouse near Zwolla, 100 kilometres from Amsterdam, is suspected to be the current chief of staff of the "Real IRA".
Gardaí say there is no direct link between the Dutch and Irish operations, and that they would have discovered a warehouse in Inniskeen, Co Monaghan, whether or not the cigarettes were found in the Netherlands.
In all five men, from the Dundalk, north Louth and south Armagh region, are being questioned by gardaí and Dutch police. A woman was released without charge from Ashbourne Garda Station in Co Meath at 6 p.m. yesterday.
Three brands of cigarette - Sovereign, Regal and L&B - were found in the large, converted cattle shed near Inniskeen. The building appeared to have been altered to make it an ideal location for storing cigarettes as the roof and most of the walls had been sprayed with foam that prevents condensation.
Gardaí confirmed that the three men on the premises had been in the process of repackaging the cigarettes into plain cardboard boxes for distribution to points of sale on both sides of the Border.
The woman was arrested later on Tuesday night after gardaí searched a premises and found a quantity of bank records and around £3,000 sterling in cash.
The cigarettes had arrived concealed inside the shells of computer hard-drives.
The shells were then packaged into large boxes, and in the shed were 22 large pallets which each held 55 such boxes. Each of the boxes had markings to suggest it contained electrical equipment, and it is likely they would have escaped closer examination by the authorities.
It is believed once emptied the computer shells would have been transported back to the Netherlands to be reused.
The Garda operation was co-ordinated by Chief Supt Michael Finnegan, of Louth/Meath division, who said the detection was a setback to those involved in smuggling for dissident republicans.
"Cigarette smuggling is the single greatest source of fundraising for the "Real IRA", and we believe this will deal a serious blow to that aspect of their activities," he added.
A spokesperson for the Revenue Commissioners said a recent investigation found that a case of 10,000 cigarettes smuggled from the US cost a smuggler just $111, i.e. less than 25 cent per pack of 20.
The high excise duty rates on cigarettes in the UK and the Republic make them the biggest destinations in Europe for smuggled cigarettes.