Officials said they were tipped off about an imminent attack in the southern German city shortly before midnight as Europe prepared to ring in the New Year in an atmosphere of unprecedented security, AFP reports.

European capitals have been on high alert since November when ISIS terrorist slaughtered 130 people in a series of gun and suicide attacks in Paris, stoking fears they could stage further attacks over the Christmas and New Year holidays.

Just over an hour before the celebrations began in Munich, police ordered the evacuation of the city's main rail station and another station in the west of the city after being tipped off about a possible "terror attack".

Police said an investigation was under way, with 550 officers deployed to hunt down the suspects and secure the city, warning that the threat remained "high".

Munich police chief Hubertus Andrae said "five to seven" suspects were believed to be involved in planning a "suicide attack" as the festivities got under way.

German officials said they were tipped off by a "friendly intelligence service" about the plan, which was to have been executed at around midnight, said Joachim Herrmann, interior minister for the southern state of Bavaria.

It is reported that Germany had been tipped off by both US and French authorities, it said.