There were a total of 3.57 million people without jobs, the agency said, a drop of 75,000 from the previous month. In February, unemployment had been 8.7 percent, according to unadjusted data.
"The spring revival has reached the labour market. Unemployment is dropping," said the head of the labour agency, Frank-Jürgen Weise. Analysts polled by Dow Jones Newswires had expected the number of unemployed adjusted for seasonal factors to climb by 10,000 this month but that figure in fact dropped by 31,000.
Germany has managed to limit the increase in unemployment despite suffering its worst post-war recession last year, with state subsidies that allowed for shorter working hours at a little below normal pay levels.
However, despite the positive figures, most economists expect the jobless figures to rise in Germany as companies adjust their workforces after the economic crisis.
In a regular report on the German economy published Tuesday, the International Monetary Fund said it expected an average jobless rate of 8.6 percent this year, rising to 9.3 percent in 2011.
"With a diminished growth outlook, firms will eventually adjust their workforce, especially in the hard-hit manufacturing sector," the Fund said.