Two men were arrested in the border town of Tachileik in eastern Shan State during the bust, which netted drugs with a street value of $2.3 million, police told AFP.
"We seized 404 blocks of heroin weighing 140 kilogrammes," police Col Myint Aung of the anti-narcotic department said. "It's the largest seizure of heroin so far this year."
Opium, heroin and methamphetamine pills are frequently smuggled from Myanmar into Thailand, the gateway to the Southeast Asian narcotics market.
State-run newspapers confirmed the seizure, adding the arrested men were heavily armed with military rifles, several pistols and hand-grenades.
The United Nations Office on Drugs and Crime says 10% of the world's opium is produced in Myanmar, making it the second-largest producer of the drug - the base ingredient for heroin - after Afghanistan.
Myanmar has pledged to crack down on drug production and smuggling, despite the challenges posed by policing vast, remote areas where armed ethnic rebel groups are often accused of using profit from narcotics to fund their operations.
Authorities torched some 1.3 tonnes of seized opium, 225 kilogrammes of heroin and 1.2 tonnes of methamphetamine tablets last month to mark World Drugs Day.
Shan State is part of the "Golden Triangle," a region laced with smuggling routes that covers parts of Laos, Thailand and Myanmar.