Gen. Mohammed Ibrahim said security forces acting on a tip uncovered the weapons in a car and truck on the highway near the Mediterranean resort city of Marsa Matrouh, which is along the coastal highway that runs to the Libyan border.
After chasing down the vehicles, one of the smugglers was killed in an exchange of fire, Ibrahim said.
Among the munitions confiscated were 138 grad rockets and some 7,000 rounds of ammunition, according to Ibrahim, who called the bust the “biggest” in the history of the Interior Ministry.
He said the weapons were smuggled from the Libyan city of Sirte, the hometown of the country's late dictator Moammar Gadhafi and the last regime stronghold to fall in the Libyan civil war last year.
He added one of the smugglers said the weapons were bound for Egypt's Sinai Peninsula and from there to the Gaza Strip.
During the eight-month conflict that led to the toppling and killing of Gadhafi, Libyan citizens-turned-fighters stormed weapons storehouses and military camps to arm themselves, and the country is awash in everything from machine guns to mortars.
Since then, the country has become a key source of illicit arms.
A flood of weapons from Libya has added to security concerns in Egypt, where police have yet to fully return to the nation's streets since disappearing early in last year's uprising.
Authorities fear the weapons most often fall into the hands of Islamist militants in Sinai who have moved swiftly to exploit the security void, carrying out almost daily attacks on security forces.
They enjoy near complete control over parts of border towns like Rafah. Elsewhere in Sinai, they have taken advantage of long-standing grievances by the area's Bedouin inhabitants over services and development to recruit and whip up anti-government sentiment.
Israeli officials also have expressed concerns about looted weapons from Libya, saying that munitions, including longer-range Scud missiles, are being smuggled from there through Sinai and into the Gaza Strip, which is run by the Palestinian militant group Hamas.
In April, two rockets believed to have been smuggled from Libya were fired from Egypt's Sinai desert toward the Israeli resort town of Eilat.
No one was hurt and Egypt denied that the rockets were fired from its territory.