A total of 240 investigators and representatives from the office were tasked with retrieving documents that would back up suspicions against seven former and current members of the bank's management board.
The investigation included several private homes, and has already recovered a considerable amount of documents, the prosecutor's office said.
It focused on several hundred million euros in 2006 investments in the US subprime market for high-risk mortgages.
A prosecutor's spokeswoman said bank directors were suspected of continuing to invest in risky financial instruments even after it became clear the market was about to collapse.
In mid 2007, that triggered a global financial crisis which subsequently worsened following the collapse of the US investment bank Lehman Brothers in September 2008.
Along with many other regional German banks, LBBW had invested heavily in risky assets and complex financial instruments which lost much of their value during the financial crisis. With the global economic slowdown, LBBW has also had to sharply increase its provisions against loan defaults by clients, while booking heavy restructuring costs.
In exchange for a state bailout, the bank has had to drastically curb its operations and now concentrates on financing small- and medium-sized German enterprises.