Nokia will pay out the sum plus interest to the state after announcing earlier this year it was closing down its last plant in Germany in the town of Bochum.
The economic weekly WirtschaftsWoche reported that the German research ministry had given Nokia €4 million in grants to finance its factory in Bochum, which is in the heart of the industrial Ruhr basin.
The fruit of Nokia's research should have been exploited by Germany, but that will no longer be the case after the Finnish phone maker closes Bochum, according to the ministry.
To try to settle the dispute, Nokia had already started a €20-million "Growth for Bochum" foundation providing capital for entrepreneurs in the mobile telephone and information technology sectors.
Nokia announced in January it would shift production from Bochum to Romania due to lower labour costs.
The firm's decision sparked massive protests in Germany, where 2,300 jobs were expected to be lost and local sub-contractors were also expected to be hit.