Cops claim the boys were going to be sold on the black market for £1,000 and the girls for £700.
They say the women were lured into the factories in Lagos with the promise of domestic work before being forcibly impregnated.
Lagos police spokesman Bala Elkana said the victims and four babies were rescued from four locations in the Ikotun area.
The victims, who are mainly from eastern Nigeria, said they were tricked into coming to Lagos with the promise of getting job as domestic staff.
Mr Elkana said: “The young women were mostly abducted by the suspects for the purpose of getting them pregnant and selling the babies to potential buyers.
“The girls were tricked with employment as domestic staff in Lagos.”
Nigeria has a high incidence of syndicates that keep young women to produce babies for sale, which have locally been termed “baby factories”.
Two women aged 40 and 54 were arrested in connection with the case and police were still looking for a third.
One of the freed women, who did not want to be named, said she had been impregnated by her boyfriend and told by her aunt that there was a job for her in Lagos.
She said a woman to whom she was introduced had induced her labour when she was seven months’ pregnant.
“After being in labour for three days, that was when police raided the place and took all of them.
“The baby came out weak and finally died,” she told Reuters.
Elkana said the state criminal investigation department would take over the case and was working with other agencies to resettle the women and girls and their babies.
Last week, around 400 boys and men, some as young as five and many in chains and scarred from beatings, were rescued from a building in the northern city of Kaduna that purported to be an Islamic school.
Dubbed the “house of horrors“, the youngsters were starved and raped.