Cocaine, heroin and cannabis were discovered at a house in Stradbroke Road in Wavertree, and at a flat in Duke Street in the city centre, during an operation by Titan, the regional organised crime unit.
One man aged 33 from Huyton was arrested inside the house on suspicion of conspiracy to supply Class A drugs. A second man, aged 31, from Kirkby, was later arrested in the Wavertree area.
They have been taken to separate police stations for questioning.
Crime scene investigators from Merseyside Police carried out an extensive forensic examination of the house and flat and a number of vehicles were removed from outside the house.
The drugs were found in a van and various parts of the house, and further substances were discovered at the flat.
Detective Superintendent Jason Hudson said: "This is a huge seizure, perhaps our largest ever, of what is estimated to be up to 160 kilos (350lbs) of cocaine and heroin which could have had a street value of at least £16m, probably more.
"These drugs would have made a lot of criminals a lot of money at the expense of the harm they would have caused our communities, so it is immensely satisfying to have seized them before they were supplied on the streets of the North West.
"Today's operation was a fast-moving and dynamic situation and Titan detectives worked with colleagues in Merseyside Police to ensure the suspects were quickly arrested and the evidence was secured."
An investigation is ongoing and both properties remain cordoned off.
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