Lt Col Jonathan Conricus, a military spokesman, told reporters on Sunday that Israel used a new set of "tools" to destroy the tunnel.
He said forces had detected the tunnel months ago and continued to monitor construction efforts by Hamas militants before demolishing it.
He said the tunnel was not complete, but was "very substantial," equipped with electricity, communications equipment, and a ventilation system.
It was located about one kilometre from an Israeli community.
Israel has placed a high priority on halting the tunnel threat since Hamas infiltrated Israel during the 2014 war.