U.S. agents and Mexican Federal Police officers simultaneously entered the tunnel, which connected Nogales, Arizona, to Nogales, Sonora, Mexico, from their respective sides of the border.
Mexican police seized 550 pounds of marijuana discovered inside the tunnel, ICE said in a statement.
The tunnel, according to evidence gathered at the site, was completed this week, ICE said.
The tunnel, which is 33.5 meters (110 feet) long, lacks the ventilation and electrical systems found in more sophisticated smuggling conduits under the border.
The entrance to the tunnel on the Mexican side of the border is in the yard of a house, while the exit on the U.S. side is in a warehouse.
Border Patrol Tucson Sector agents also participated in the investigation.
Federal law enforcement agents have found 22 tunnels in the Nogales, Arizona, area in the past three years.
In December, Mexican army troops found a partially constructed 50-meter (164-foot) tunnel in Nogales.
The tunnel was found on Dec. 9 during an operation targeting drug traffickers and other organized crime groups.
Since the mid-1990s, authorities have discovered many clandestine tunnels along the U.S.-Mexico border, with nearly 75 drug tunnels being found in the past four years.
People traffickers and drug cartels often use clandestine tunnels to cross the vast U.S.-Mexican border, which runs 3,200 kilometers (1,988 miles).
On Nov. 15, U.S. authorities announced the discovery of a drug tunnel linking San Diego and Tijuana.
Agents found nearly four tons of marijuana in bales bearing the markings "JR," "X0" and "el Lic" inside the tunnel, which was nearly 313 meters (342 yards) long and had a hydraulic elevator with the capacity to carry three people about 20 meters (65 feet) into the ground.
The tunnel connected an unfinished building near the Tijuana international airport and a warehouse in the Otay Mesa area of San Diego.