The accused were allegedly carrying the counterfeit currency notes in a car, said Amadalavalasa police station inspector Naveen Kumar.
The accused are identified as Srinivasa Rao, Umapathi, Simmanna and Kodada Krishna.
Police said they were planning to transport the currency to Malda in West Bengal by handing it over to their contact in a Guwahati-bound train.
A case is registered and further investigation is on.