In the latest political scandal to rock Germany's security services, the Hesse state crime office and the Frankfurt prosecutor's office said they had carried out dawn raids at the homes and workplaces of six of the suspects.
"Seventeen of the accused are believed to have distributed content constituting incitement of racial hatred or images linked to a former National Socialist organisation," the authorities said in a statement on the investigation, which was launched in April.
Three officers stand accused of obstruction of justice "because they were participants of the relevant chat groups and as superiors failed to stop or sanction the communication".
Most of the offending content was exchanged in 2016-17, with the most recent from 2019.
The accused are all male and range in age from 29 to 54. Nineteen are active police officers and one retired. Prosecutors said all had been temporarily relieved of their duties, with one suspect formally suspended.
The probe began with allegations against a 38-year-old officer with the SEK special deployment commando in Frankfurt who was accused of sharing illicit content including child pornography.
A search of his mobile phone uncovered some of the racist chats in question.
The case is only the latest example of alleged extremism in the ranks of the German police.
Last September, officers in the most populous state of North Rhine-Westphalia swooped on colleagues accused of spreading what prosecutors called "repulsive" far-right propaganda in online chatrooms.
And in July, prosecutors announced the arrest of a former police officer and his wife suspected of having sent threatening emails to politicians and other public figures across Germany.
The previous month the defence minister ordered the partial dissolution of the elite KSK commando force over right-wing extremism.
