The raid was carried out in the town of Grande-Synthe, near the port city of Dunkirk in the far north of France.
Around 200 police officers including members of specialist counter-terrorism units were involved in the operation that targeted the Shiite Muslim Association Centre Zahra France.
Police raided the homes of the association's leaders and made 11 arrests in total following 12 separate operations.
The association has been on the radar of anti-terrorism investigators in France due to alleged support for jihadist groups.
French authorities also froze the financial assets of the centre which is headed by Yahia Gouasmi, who is known for his anti-Zionist views and links to Iran.
Police have been closely following the activities of the Zahra Centre “because of the strong support by its leaders for several terrorist organisations and in favour of movements backing ideas that are contrary to the values” of France.
On its website, the association says its purpose since its foundation in 2009 has been “to make known the message of Islam through the eyes of the Prophet and his family.”
It was unclear whether the arrests were linked to a suspected plot in France to bomb a gathering of Iranian opposition group the National Council of Resistance of Iran (NCRI) in June.
Police swooped on six people in Belgium, France and Germany after authorities revealed the alleged plot, including an Iranian diplomat.
France is still on high alert after a wave of Islamist attacks since 2015 in which 246 people have lost their lives.