Detectives from Reactive and Organised Crime arrested a 27-year-old man following the search of a house in the Mourneview Park area of Newry on Friday.
Detective Inspector Keith Gawley said the search took place after enquiries led police to believe that the occupant was involved in criminal activities.
He added: “Officers entered the property shortly after 6pm on Friday evening and the man was arrested a short time later on suspicion of possession of Class A drugs, possession of Class A drugs with intent to supply and possession of criminal property.
“A quantity of suspected class A drugs were recovered along with articles believed to be used in the supply of illegal drugs.
“A sum of cash and three vehicles were also seized as part of the investigation.
“The man has since been released on police bail as our enquiries into the matter continue.”
Inspector Gawley continued: “I would encourage anyone who has any information about the use or supply of illegal drugs to contact police on 101 and pass that information on. Information can also be given anonymously through Crimestoppers on 0800 555 111.”