The operation, carried out in cooperation with Bulgarian police and the European Union police agency Europol, led to the arrests of 34 suspected members of the gang and the "liberation" of 13 victims who were forced to prostitute themselves, police said in a statement.
The gang is suspected of recruiting young women in deprived areas of Bulgaria, the EU's poorest country, and bringing them to Spain where they are forced to work as prostitutes in the streets of Puerto Banus, a luxury marina and casino complex near Marbella.
"If they refused they were violently attacked and their family members in Bulgaria were threatened with harm," the statement said.
Women who had left behind children in Bulgaria were "especially sensitive" to this threat, it added.
The gang also forced the women to steal credit cards and other valuables from clients, police said, with some women suspected of drugging the men to make them easier to rob.
Police began their investigation in September 2014 after a Bulgarian woman told officers in Marbella that she had escaped from people who were forcing her to work as a prostitute.
"The probe allowed investigators to prove that the first exploiters who were found did not act alone, but were part of an enormous international network that operated mainly in Spain and Bulgaria, and whose aim was to achieve the total control of prostitution on the coast of Marbella," the police statement said.
Officers arrested 26 of the suspected members of the gang in Spain and eight in Bulgaria. Police did not say when the arrests were made.
Agents carried out searches in 36 locations in the two countries as part of the operation.