The higher administrative court (VGH) in Mannheim concluded the fees are in line with basic guaranteed professional and educational freedoms. Economy minister Peter Frankenberg (CDU) commented that the decision backs the social sustainability of the fees. The verdict, however, has yet to become legally binding.
Four students from the University of Karlsruhe and the University of Education in Freiburg filed a collective lawsuit against the state, arguing that tuition fees deter potential low-income students from attending university.
A representative for the plaintiffs said an appeal is "very likely."
The German Education Ministry has defended tuition fees despite an October study that found fees to be among the top reasons students give up on higher education.
The introduction of university fees has been highly controversial in Germany, where education has traditionally been paid for by the state.