"This is the biggest amount of cocaine ever seized in Germany," police said in a statement.
Customs officers discovered the drugs on Monday when searching pallets of wood briquettes in Hamburg, Germany's biggest port.
Thirty-one of the 32 pallets searched also contained packets of cocaine "very professionally hidden" among the briquettes, the police said.
Officials seized a total of 1,244 packets of "very high purity" cocaine imported from Paraguay.
The seven suspects, aged between 27 and 35, were arrested in connection with the bust. Six of them were already behind bars on Tuesday, a police spokesman said.
The two main suspects are a Paraguayan citizen, 35, who lives in Hamburg and a 31-year-old German citizen of Turkish origin.
Some 200 police officers followed up with 19 searches in Hamburg and the German states of Schleswig-Holstein and North Rhine-Westphalia. At the home of one 28-year-old suspect, police said they found €450,000 in cash.
Police said they became aware of the international cocaine trafficking network following a small three-kilo cocaine bust and arrests in November.
Police have also identified the cocaine dealers in Paraguay who were involved in concealing the drug in the pallets of wood briquettes, which were shipped from Asuncion to Hamburg.