Police said organisers recruited school girls in Yongkang city and sought clients for them, including wealthy businessmen.
They also also confirmed that three others had been detained, including a local legislator.
The suspects were arrested in early April, said the police.
Police initially denied reports of the investigation, but the story attracted considerable attention on the internet.
In a statement posted on their website Yongkang police said that the ring had been in operation since February 2011, but they only received reports from the public early this year.
Police sources told the official Xinhua News Agency that all girls involved were under the age of 18.
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