They say the plan was to strike during an Independence Day ceremony on 17 August, and declare an Islamic state.
The militants also planned to take over hotels and kill foreigners, they said.
The announcement came a day after three suspected militants were detained in the latest in a series of anti-terror raids.
Police said the men were linked to a militant training camp discovered in Aceh in February. Dozens of suspected Islamists have been detained since then and a number killed.
'Assassination targets'
The announcement, by National Police Chief Bambang Hendarso Danuri, came at a briefing on raids by carried out by the authorities since the discovery of the Aceh training camp.
"They planned to attack and murder state officials at the 17 August celebrations," he said. "There, they saw all of the state officials as assassination targets, including the state guests attending the ceremony."
They believed that this would help them create a state ruled by Shariah law, he added.
"Their plan was also to launch attacks in Jakarta against foreigners - especially Americans - and attack and control hotels within certain communities, imitating what happened in Mumbai," he said.
The Mumbai attacks in 2008 left 174 people dead, nine of them gunmen. The militants attacked two luxury hotels, a train station and a Jewish centre.
The discovery of the Aceh camp raised fears that terror networks re-emerging in Indonesia.
Security analysts say the events show that there is still support for extremism in Indonesia despite the efforts of police to clamp down.cheap north face jackets
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