"The five accused formed a pan-regional Salafist-jihadist network, with the accused Ahmad Abdulaziz Abdullah A. taking on the leading role," said a statement from the prosecutors' office.
According to Süddeutsche Zeitung (SZ) information, authorities have long considered Ahmad A., who goes by the alias Abu Walaa, to be one of the central figures in the German Islamist scene and have described him as "the faceless preacher."
Federal prosecutors confirmed that the arrested men are 32-year-old Iraqi Ahmad Abdulaziz Abdullah A., 50-year-old Turkish citizen Hasan C., 36-year-old German-Serbian citizen Boban S., 27-year-old German Mahmoud O., and 26-year-old Cameroonian Ahmed F. Y.
The arrests come after a year-long investigation into Abu Walaa and his inner circle, who investigators believe recruited young Muslims to travel to Syria to fight for Isis, supporting them logistically and financially.
As part of the investigation, police raided a mosque in late July in the small northern town of Hildesheim, Lower Saxony, which has long been considered a centre of the German Salafist scene. Abu Walaa is alleged to have given sermons in the mosque encouraging people to travel to Syria to fight.
Two of the other men arrested were preachers in the western state of North Rhine-Westphalia who are alleged to have links to Abu Walaa.
Burkhard Freier, who leads North Rhine-Westphalia's domestic security service, said the group had "no concrete plans of attack."
The probe will focus on two elements, he said: "first on the radicalisation of young people and secondly - which is something that the investigations must still prove - was there people smuggling, was there ideological conditioning and ideological preparation for a departure to Syria."
Hasan C. was in contact with two teenagers with Islamist backgrounds who were arrested over an explosion that wounded three people at a Sikh temple in the western city of Essen in April, said Freier.
SZ reports that Tuesday's arrests were made possible by a statement given by a 22-year-old who returned to Germany in September after fighting for Isis in Syria.
In an interview with SZ while still in Turkey, the young man had described Abu Walaa as “Isis' number one in Germany.”
According to figures released in May by German intelligence services, 820 jihadists have left Germany for Syria and Iraq.
Almost a third have returned and 140 were killed while abroad, while around 420 are still in Syria or Iraq.
Germany has so far been spared large-scale jihadist attacks.
But it was shaken by two assaults claimed by Isis and carried out by asylum seekers - an axe rampage on a train in Würzburg that injured five, and a suicide bombing in Ansbach in which 15 people were hurt.
Police said last month they had foiled an alleged plot by a Syrian refugee to bomb one of Berlin's airports.