The Navy impounded a speedboat with a Togolese flag and weapons and ammunition 12 nautical miles north of Sinai's Ras Mohamed on Thursday, said Army spokesperson Ahmed Ali.
The boat reportedly belonged to a private security service company.
Ali said on Facebook that the boat's license indicated that the company secures ships against pirate attacks during their passage through high risk areas south of the Red Sea and off the Somali coast.
The weapons and ammunition found aboard the boat are necessary for the company to carry out its mission, the official added.
Local press reports had said two boats belonging to Ukrainian security companies were impounded, carrying 150 boxes full of weapons and ammunition.
But Al-Masry Al-Youm quoted a military source on Thursday as saying that investigations are underway into the seven-man crew, which includes Ukrainians, Britons and Americans.
The boat, which was coming from Malta, tried to stop near the Adabeya port in Suez to unload the shipment, but could not due to strict security measures in this area, the source added. It then sailed to Ras Mohamed to load the shipment onto smaller boats, but was impounded by the Navy.
The shipment included machine guns, shells and rockets, land mines, hand grenades and M-60 rifles.
Edited translation from Al-Masry Al-Youm