Uli Stegmaier, 60, saw turnover at his pub in the southern town of Balingen fall by 20 percent following the implementation of the smoking ban in the state of Baden-Württemberg in August 2007, the paper said.
His brother-in-law, Helmut Rathmann, told Bild: "His suicide note dealt exclusively with his bitterness about the smoking ban. It was not aimed at his family but at politicians."
Stegmaier, owner of the Bären bar for the past 30 years, hanged himself in the attic of his farmhouse. He leaves a wife and five children.
Friends and family said he had campaigned against the ban because he feared that it would force him to close the pub.
In recent post on the internet he wrote: "The state is riding roughshod over the rights of barkeepers and threatening the livelihood of many."
Rathmann said Stegmaier he had donated money to activists who want to take the regional government to court in a bid to have the ban reversed.
Germany has implemented a ban on smoking in bars and restaurants across most of the country in recent months. In the majority of states it took effect on January 1. But enforcement has been spotty at best and several states have even weakened the ban since then.