The TNT had been prepared to be moved, the official said, adding that police suspect it might have been destined for Gaza.
A network of tunnels lead from Egypt into Gaza, which Israel has blockaded since the Islamist group Hamas seized power there in June 2007.
The official said that police found and destroyed two tunnels south of the Rafah border town Thursday.
The tunnels, which both Israel and Egypt have sought to destroy, are used for smuggling much needed goods, such as food and fuel as well as weapons.
Last week, London-based al-Quds al-Arabi newspaper reported that Egyptian security forces uncovered 266 rockets and three antitank missiles in a cache near the border with Israel.
A security source told the newspaper the weapons were likely destined to be smuggled into the Gaza Strip.
The cache, that was located in northern Sinai, also contained 43 mines, 51 shells, 21 grenades and 178 machinegun bullets.
The source said Egyptian security forces did not find any suspects when they stormed the hideout, in which they found another 50 grenades, 80 mortar shells, 20 rockets and some 500 bullets.
Roee Nahmias contributed to this report