The four men (aged between 35 and 40) were arrested in a Vienna hotel with €500,000 worth of luxury watches and jewellery which had been stolen in a robbery in Montreux, Switzerland on January 15th.
They are not thought to have carried out the robbery themselves, but acted as the receivers of the stolen goods, and were planning to sell the watches to wealthy clients.
"This is the first time in Austria that we have managed to identify and arrest members of the Pink Panthers redistribution channel," Ewald Ebner from the Federal Criminal Police Office said at a press conference.
Police got a tip-off that a courier from Serbia was travelling to Vienna in order to buy luxury watches. After he crossed the border into Austria police put him under surveillance and he was observed meeting up with a Vienna-based Israeli man in the city's 2nd district, who drove him to a hotel.
After money had changed hands and the Serb emerged from the hotel with €57,000 in cash police swooped and arrested him, along with two Israelis who are resident in Belgium and had been involved in the sale of the watches.
In the hotel room police found a 37-year-old Israeli man carrying a suitcase with a false bottom which contained 25 watches. One of the watches was valued at about €53,000.
Ebner said that the men were "uncooperative" when they were arrested and pretended they knew nothing about the seized loot. If found guilty of handling stolen goods the men could face between six months and five years in prison.
The operation was carried out in cooperation with Belgian, German, Serbian and Swiss police.
The Pink Panthers gang is known for lightning-fast armed robberies targeting high-end jewellery stores in Europe, the Middle East, Asia and the United States.
They are believed to have carried out robberies worth in excess of €500 million since 1999.
Many gang members are known to originate from the former Yugoslavia, but they work across countries and continents. The Pink Panthers have been responsible for several robberies in Austria.
In October, a member of the Pink Panthers was released early from prison in Austria, after an embarrassing gaffe caused by a computer error.
On Tuesday, there was an armed robbery by three men on a jewellery store in Graz, however there is no suggestion at this stage that the culprits are linked to the Pink Panthers.