German police have arrested eight suspected members of a right-wing militant group driven by racist ideology and conspiracy theories who had been training in warfare for the downfall of the modern German state.

News of the arrests came as a 450-strong police operation was under way to dismantle the group, named by prosecutors as Saechsische Separatisten, or Saxony Separatists.

"Our security authorities have thus thwarted at an early stage militant coup plans by right-wing terrorists, who were longing for a Day X to attack people and our state with armed force," Interior Minister Nancy Faeser said in a statement.

This would be the second coup plot uncovered in Germany in recent years.

The so-called Reichsbuerger movement was exposed in 2022, led by a would-be prince with ambitions to overthrow the state and install a caretaker government, in a case that shocked Germany with its detailed network and planning.

The group targeted in Tuesday's operation was formed no later than November 2020, the federal prosecutor's office said in a statement.

"It is a militant group of 15 to 20 individuals whose ideology is characterized by racist, anti-Semitic and partially apocalyptic ideas," the statement added.

Convinced that Germany is nearing collapse, with the fall of government and society prophesied for an undetermined "Day X", the group had been training to use force to establish a new system in the country's east inspired by National Socialism, according to investigators.

"If necessary, unwanted groups of people are supposed to be removed from the area by means of ethnic cleansing," the statement said.

Those arrested include four suspected founding members, identified as suspected ringleader Joerg S., as well as Joern S., Karl K. and Norman T. Some are to be prosecuted as minors and adolescents.

The eight face charges of participating in a domestic terrorist organization.

Prosecutors said they completed paramilitary training, focusing on urban warfare, firearms handling, nocturnal marching and patrolling.

The group had also procured military hardware, such as camouflage fatigues, combat helmets, gas masks and bullet-proof vests.

Seven of the suspects were captured in and around the eastern cities of Leipzig, Dresden and Meissen, while another was taken into custody in the Polish border town of Zgorzelec.

Authorities were searching around 20 premises in execution of court-ordered warrants, in measures also targeting another seven suspects.