The gruesome find in a remote field in the eastern state was made over a six-month period, starting in August when mothers searching for their missing children discovered the first of the clandestine graves.
So far, forensic experts have found 242 skulls in 124 graves.
"It's impossible that nobody realized what was happening here, with vehicles coming and going," said the prosecutor, Jorge Winckler Ortiz.
"If this wasn't done with authorities' complicity, I don't know how else it could have been done," he told a press conference in the open field outside the port city of Veracruz where the bodies were found.
Winckler took office in December after the state's previous governor, Javier Duarte de Ochoa, stepped down. Duarte is now a fugitive from justice suspected of embezzling hundreds of millions of dollars.
The prosecutor has taken over the investigation into the graves, a shocking discovery even by the standards of Mexico, where grisly killings by drug cartels are common currency.
He said it would take until May for investigators to receive the funds needed to carry out DNA testing on the bodies.
The field where the graves were found is covered with small iron crosses placed by the families of the missing.
Of the 124 graves, investigators had excavated 121 as of the last official update, on March 10.
They have nicknamed one grave "The Reservoir" because it is so big, Winckler told AFP.
"It's a terrible place, where a lot of bodies were found piled very close together," he said.
Veracruz is the scene of bloody disputes between the Los Zetas and Jalisco Nueva Generacion drug cartels.
Elsewhere in Mexico, mass graves have been found containing hundreds of bodies. In January, 56 bodies were found in a grave in the northern state of Nuevo Leon, where drug cartels vie for control of the routes toward the United States.
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