Spanish Guardia Civil arrested two brothers in the early hours of Wednesday morning in Girona, Catalonia, for financing Isis, Spain's Interior Ministry said in a statement.
The brothers, aged 33 and 22-years-old and of Moroccan nationality were also arrested on charges of collaborating with a terrorist organization and indoctrination.
The investigation, which was carried out in collaboration with Spain's National Centre for Intelligence, is the first in Spain to provide concrete evidence of funds being sent from Europe to finance the so-called Islamic State.
The pair, along with another brother who died in Syria, used false identities given to them by Isis to send funds to the terrorist group in Syria and Iraq, which were used to finance its operations in conflict zones.
The death of their brother, who travelled to Syria with his wife and two children to fight for Isis, did not stop the brothers from sending money to terror group. According to a statement from Spain's Interior Ministry, the funds were a permanent source of financial aid to Isis.
Officers were searching the homes of the two brothers to better understand the links between them and the financial administrators of Isis.
Spain has been on level four anti-terrorist alert since June 2015, when a mass shooting attack took place in the resort of Sousse, Tunisia, killing 38 people.