The result published by the national statistics office compared with a 2009 figure of 0.4 percent, a record low since German reunification in 1990.
In December, Europe's biggest economy posted inflation of 1.7 percent on a 12-month basis, the Destatis statistics office said, exceeding an average analyst forecast of 1.5 percent compiled by Dow Jones Newswires.
The figure remained well below the European Central Bank's medium-term inflation target of below but close to 2.0 percent, but marked a sharp upturn nonetheless.
"Today's German report supports our expectation that euro area 'flash' HICP (harmonised index of consumer prices) will increase to 2.1 percent from 1.9 percent" in its last reading, Barclays Capital economist Fabio Fois said.
On a monthly basis, German consumer prices gained 1.0 percent in December, Destatis said.
Throughout the year, inflation was driven by higher costs for crude oil and other energy products and rising prices for fruits and vegetables, it added.
In the southern state of Baden-Württemberg, prices gained 1.9 percent in December, their biggest increase since October 2008.
The result is calculated from data provided by six representative German states, and detailed figures are to be released on January 14.