French police have arrested 17 people, including the deputy mayor of a Paris district, in an operation with Swiss police into the suspected laundering of about €40 million (48 million francs, $52 million) of drug money.

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Prosecutors in Geneva said on Saturday that Swiss police had arrested three people, including two brothers of Moroccan origin, in connection with the same ring.

A raid on the Geneva home of one of the brothers led to the discovery of €800,000 in cash, and 160 watches and high-value jewels with an estimated value of €2 million in a hidden safe, said Le Temps newspaper.

The arrests came after French authorities arrested 17 people on Friday and Saturday as part of the investigation.

Florence Lamblin of France's Green Party, a deputy mayor of a Paris district, was among those charged in the case.

She is being investigated over "organized money-laundering and association with criminals," a judicial source said.

While she remains at liberty on bail, seven of the 17 were held in custody, those suspected of trafficking in drugs or dealing in drug money.

The arrests came after an investigation that was launched in February into the smuggling of tonnes of cannabis from Morocco to the Paris region via Spain.

Lamblin resigned on Saturday from her post but colleagues said she had denied any involvement.

Her lawyer Jerome Boursican told AFP she had held €350,000 from a family legacy in a Swiss account.

A person she trusted had put her in touch with someone who repatriated the money to France, only for her to find herself caught up in the investigation, he said.

At most, he said, she was guilty of not having declared the money to the tax authorities, he added.

"She told me by SMS that she had done absolutely nothing wrong," Green Party member Yves Contassot said.

A police source said it was the biggest case of its kind to have been cracked by the French police.

Those arrested and released were freed on bail of between €80,000 and €1 million, a judiciary source said.

A source close to the case said police had found several million euros in cash and goods during the searches of suspects homes and safe deposits in both countries.

Swiss press reports said the brothers in custody were suspected of having laundered the cash via a Geneva-based finance company and with the possibly unwitting participation of French tax evaders.