It stretched some 900 yards inside the Gaza Strip, 180 yards in Israeli territory, and several hundred yards in Egyptian territory.
The attack was carried out on Saturday, when the Israeli jets bombed an area that was situated at the east of the southern town of Rafah, and it was witnessed by various residents of Gaza.
Commenting on the demolition of the tunnel, Prime Minister Binyamin Netanyahu said that "some people say that when the IDF attacks Gaza they are hitting sand dunes, but that is incorrect".
The army said that the tunnel, which ran for nearly a mile, extended 650 feet into Israeli territory, and was used to bring weapons into Israel for use by terrorists.
The Israeli army said it attacked "underground infrastructure along the border with Egypt".
"This evening the IDF attacked Hamas's central terror infrastructure in the Gaza Strip", Netanyahu said on the tarmac at Ben Gurion Airport before departing Israel for a week-long visit to India.
Earlier Saturday, Israel's defence ministry said the Kerem Shalom goods crossing between Gaza and Israel near Rafah would be closed from Sunday "until further notice".
The tunnel stretched a total length of around a kilometre and a half, he said. The destruction of the terror tunnel network is an essential component of our systematic policy to harm Hamas's strategic capabilities. "Hamas must understand that we will not permit these attacks and we will respond with even greater force".
Recently, tensions have run high along the border, where Israel continues to build an anti-tunnel wall and where three offensive tunnels were recently unearthed, as well as a recent surge in rocket fire Haaretz said.
The attacks from Gaza, which Israel has blamed on groups not affiliated with Hamas, have drawn Israeli air strikes, usually on targets that have been evacuated.
On Friday, approximately 1,000 Palestinians took part in violent demonstrations in four separate locations along the security fence surrounding Gaza, rolling burning tires and throwing rocks at the barrier and the soldiers on the other side, according to the Israel Defense Forces.