The Interior Ministry's spokesman appeared on television to announce that the military unit had been discovered, and named 12 people who he said were members.
He said the group had shot dead five policemen last month in the province of Beni Suef.
Egyptian authorities have been cracking down hard on the Brotherhood since army chief Field Marshal Abdel Fattah al-Sisi toppled Islamist President Mohamed Mursi in July.
It has been branded a terrorist group, and security forces have killed about 1,000 of its members in the streets.
The Muslim Brotherhood, which says it is opposed to violence, accuses Sisi of staging a coup and undermining democracy.
State television aired what it said was a confession by one the military wing's members. He recalled meeting a man who he said had offered to teach him and others how to use weapons.Human rights groups accuse the army-backed government of widespread human rights abuses and stifling dissent.