The Frankfurt regional court has imposed an injunction on Uber and its ride-sharing service UberPop, the Frankfurter Allgemeine Zeitung reported on Wednesday.
The court said Uber would face up to €250,000 in fines for each violation of the ban.
The German Taxi Association (GTD) had previously been granted an injunction against the company, but a Frankfurt court lifted the ban in September because it said there was no reason to settle the argument using the emergency measure.
GTD then appealed the decision and on Wednesday praised the new ruling.
"We are pleased to say that justice has been reinstated today," said taxi association chairman Dieter Schlenker in a statement. following the decision. "Again, a court has determined [that] Uber based its business model on a breach of the law."
A spokesperson for Uber said that the company intended to appeal the decision, according to Wirtschafts Woche.
The UberPOP application puts non-professional drivers with their own cars in touch with passengers via their mobile phones or a website, for rides at budget rates.
Uber's founder Travis Kalanick has said the system will create 50,000 new jobs in Europe this year, and help take 400,000 cars off the road by encouraging drivers to use shared rides instead.
Taxi drivers across Germany have accused the San Francisco-based company of ignoring German regulations to offer a cheaper service.
They say that while they have to undergo health checks, pass a local knowledge exam and show evidence of comprehensive insurance, Uber doesn't demand the same of its drivers.
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Uber currently operates in Berlin, Munich, Frankfurt, Hamburg and Düsseldorf .
Uber has also been hit with court injunctions in Belgium, France, the Netherlands and Spain, and has faced protests from taxi firms in major cities, including London and Brussels.
French police on Tuesday raided Uber's Paris offices as part of an investigation into its service, the company told AFP.