"Credit Suisse group and the Public Prosecutor's Office in Düsseldorf have reached an agreement regarding the proceedings against Credit Suisse employees," said the bank in a statement.
"The entire proceedings are to be resolved," it added.
The bank said the settlement meant "a complex and prolonged legal dispute has been avoided."
In addition, the deal provides "legal certainty."
Stocks in the bank fell in early morning trade, sliding 2.46 percent to 22.16 Swiss francs, underperforming the Swiss Market Index, which was down 0.90 percent.
In 2010, the Düsseldorf prosecutor's office raided branches of Switzerland's second biggest bank in 13 German cities as part a probe of 1,100 clients and bank staff suspected of hiding funds from tax officials.
The raid came after officials in the German state of North Rhine-Westphalia bought a computer disc for a reported €2.5 million ($3.2 million) with information on wealthy Germans linked to the investigation.
They were urged to come forward of their own accord to avoid prosecution, and some 12,000 had done so by late March 2010.
A spokesman for Düsseldorf prosecutors said at the time that "the Credit Suisse clients have investments in total of around €1.2 billion."
German authorities have been putting pressure on Swiss banks over banking secrecy rules, which Berlin says help to shield tax cheats.
Swiss private bank Julius Baer, which was also the target of a tax probe, in April said it would pay €50 million to settle the case.
In August, Bern and Berlin also announced a comprehensive deal reached to end the long-standing tax spat between the two countries.
The deal, which is expected to be signed in coming weeks, could snare up to just short of 1,000 tax cheats over two years.
Under the deal, Swiss banks agreed to pay 2 billion francs to German tax authorities, and German taxpayers would be given a one-off chance to make an anonymous lump sum tax payment, with the tax rate varying between 19 and 34 percent of the assets.
Any taxes collected from these voluntary disclosures would be offset against the 2 billion franc advance payment and refunded to the Swiss banks.
In the future, all investment income and capital gains arising from assets held by German taxpayers would also be covered by a withholding tax of 26.375 percent.
The deal would have to be approved by both countries' parliaments before entering into vigour early 2013.
However, some German parliamentarians have already raised their opposition.
The Finance Minister of North Rhine-Westphalia, Norbert Walter-Borjans, on September 12 threatened to block the deal.
"I will do everything to prevent the indulgence given to tax fraudsters," said the social-democrat minister in an interview with German weekly news magazine Der Spiegel.
Between €130 and 180 billion are hidden in Switzerland, according to German media, which could therefore raise up to €54 billion in taxes for Berlin.