At least two people have been killed, including a small child, and dozens of others have been injured following the incident in Magdeburg, according to local officials.
They say the suspect is a 50-year-old Saudi doctor who first came to Germany in 2006.
The incident took place at the Christmas market in the city of Magdeburg, which is around 100 miles to the west of the German capital Berlin.
The city is the state capital of Saxony-Anhalt and has a population of about 240,000.
Police were called to the market shortly after 7pm.
In their initial report, posted on X, they wrote: “Extensive police operations are currently taking place at the Magdeburg Christmas market.
“The Christmas market in the city centre is closed. Further reports will be made.”
Videos posted on social media later showed a large police presence at the scene.
A recording of CCTV footage, which Sky News has not yet been able to verify, later appeared to show a black vehicle being driven into people at the market.
