Officers suspect the cash, the second-biggest haul by gardaí this year, was about to be handed over to pay for a sizeable drug shipment coming into the country.
The gang, based in the Crumlin and south-inner-city area of Dublin, is loosely affiliated with, but separate to, the Kinahan crime cartel.
Saturday’s operation is the sixth swoop in a week by the Garda Drugs and Organised Crime Bureau against a range of organised criminal gangs.
The Special Crime Task Force, set up to tackle the gangs in the Kinahan-Hutch feud, was also involved in Saturday’s operation.
It follows the seizure, by the same units, of a loaded handgun, on Friday night, in Dublin City north, which, detectives suspect was the property of Kinahan gangs.
Operating on intelligence, the DOCB and the task force stopped a vehicle on the Fonthill Road, in Clondalkin, west Dublin, at 1pm on Saturday.
They searched the car, before identifying a “secret compartment” in the back of a seat, which had the cash stuffed down a cavity.
“Whatever about having drugs seized, they hate losing cash,” said a source, “and this one was all the sweeter, as it was concealed in a secret compartment.”
A 39-year-old man arrested is a senior figure in the gang.
Sources said the €200,000 could have bought some 6.5kgs of heroin at wholesale prices, or 8kgs of cocaine, the latter capable of being cut four times.
The seizure is the second-biggest haul of cash by the bureau this year, and follows the capture of €400,000, in an operation against a major criminal grouping, on the M1 motorway, near Swords, north Dublin, in June.
Gardaí say criminal gangs have been forced to come down on one side of the Kinahan-Hutch feud, with the vast bulk associating themselves with the Kinahans.
The cartel is behind seven of the eight feud murders, with a further two murders possibly associated with it.
Gardaí are continuing operations against all levels of the Kinahan cartel and other crime gangs.