The 29-year-old tourist was arrested on Sunday for making the offensive gesture at the entrance to former death camp Auschwitz-Birkenau.
Prosecutors say she was caught by guards while posing for a photo taken by her husband.
She has been issued a fine as punishment, authorities added.
"Officers from (the southern city of) Oswiecim detained a 29-year-old woman from the Netherlands today," regional police tweeted.
"The tourist had been performing the Hitler salute in front of the "Arbeit Macht Frei" (Work Sets You Free) gate," they added.
"The detainee was charged with engaging in Nazi propaganda. She confessed."
Nazi Germany built the death camp in Oswiecim after occupying Poland during World War II.
The Holocaust site has become a symbol of Nazi Germany’s genocide of six million European Jews. One million Jewish people died at the camp between 1940 and 1945 along with more than 100,000 non-Jews.
