The plant, found in the Jonesborough area, was capable of producing 25 million litres of illicit fuel, evading over £18m in taxes and duty a year.
On Wednesday morning, while conducting searches, revenue officers discovered large underground tanks being used to launder green diesel.
A 40ft tanker, large quantities of the illicit fuel, a quantity of bleaching earth - used to launder the diesel - and pumps and equipment were removed from the site.
John Whiting, Assistant Director, Criminal Investigation for HMRC, said laundering taking place underground poses a real risk of contamination in the surrounding countryside.
"Every illegal laundering operation typically generates tonnes of toxic waste, which causes significant environmental and safety risks.
"Buying illicit fuel funds crime and supports and encourages these dangerous activities within our communities. We are all paying the substantial cleanup and disposal costs, so the only winners are the criminals," he added.
"We are working in partnership with our colleagues in the Organised Crime Task Force and I would urge anyone with information on fuel misuse in their area to contact our free telephone hotline - 0800 59 5000 - and contribute to the fight against this criminality."
David Ford, Justice Minister and Chair of the Organised Crime Task Force, accompanied HMRC officers during the operation.
"I commend HMRC and PSNI officers on discovering this underground fuel laundering plant. This success shows the important role that the OCTF has in defeating crime and protecting our community," he said.
"It is important that operations like this are detected and shut down."