Officers in Spain arrested 13 people and British police seized a further 11 at London Heathrow airport, the Spanish police said in a statement.
They raided various properties and seized records that showed the gang made 4.25 million dollars by trafficking 170 people between April and September last year.
"Most of the network's members were based in Afghanistan and gathered people who wanted to emigrate to Europe, charging them USD 25,000 (23,000 euros) each and transporting them using fake travel documents," the statement said.
From there they flew to transit points in Spain and Italy, then onward to various other European countries including Germany and Sweden.
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Police investigated the network after catching a group of Afghans who were being trafficked via Bilbao airport in northern Spain.
They then tracked down the gang's leader, a Pakistani based in Madrid who had been running the network since 2012.
"He organised the logistics and reinvested the profits of the crimes in our country, using various businesses to launder the money," the statement said.