The workers were being groomed to return to their home country to wage holy war and had studied booklets on assassination techniques, the Ministry of Home Affairs said in a statement.
Home Affairs Minister K Shanmugam added in a Facebook post that while the group were planning attacks overseas, "they could have easily changed their minds and attacked Singapore". Several of members of the group also contemplated joining armed fight with the Islamic State in Iraq and Syria, according to the MHA.
The 27 men, aged between 25 and 40, were arrested between November 16 and December 1 last year under Singapore's Internal Security Act. They all worked in construction in Singapore, where large numbers of labourers mostly from South Asia live in often cramped dormitories.
"The group members took measures to avoid detection by the authorities. They shared extremist-related material discreetly among themselves, and held weekly meetings and gatherings where they discussed armed fight and conflicts that involved Muslims," the ministry said, adding that the group was also actively recruiting members.
One of the group was not deported and is serving a jail sentence for attempting to flee Singapore after learning about the arrests of the other members. He will be repatriated to Bangladesh after he completes his sentence. The man was said not to have been a member of the group but was "in the process of being radicalised".
According to the ministry's statement, the group's members were encouraged to return to Bangladesh and "wage armed fight" against the government there, while some had sent money to terror-linked entities in their country.
The ministry said they possessed radical and extremist-related materials, including footage of children undergoing training in what appeared to be militant camps. Excerpts from a video released by the ministry showed young boys dressed in black and wearing white caps firing pistols and automatic rifles during training.
There was also a document entitled "Techniques of Silent Killing" that contained graphic images and instructions on how to carry out assassinations, using different methods and weapon. The announcement of the arrests came less than a week after militants mounted attacks in the Indonesian capital Jakarta, leaving at least eight people dead, including four suspected attackers.
The Islamic State (IS) group claimed responsibility for the coordinated bomb and gun assault on a central thoroughfare in the capital. Kumar Ramakrishna, a counter-terrorism analyst at Singapore's S Rajaratnam School of International Studies, said the arrests would likely be "disconcerting" to the public as foreign workers have become part of Singapore's social landscape.
Singaporean officials have said that the city-state remains a target by militants because of the presence of a large number of multinational corporations and its status as a regional financial centre. Singapore authorities in late 2001 foiled an attempt to carry out bomb attacks on US and other foreign targets in the city-state, arresting several suspects in the process.
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