"I am delighted because Islam and Muslims are part of our city and part of our life," said the mayor of the city state, Jens Böhrnsen, after signing the deal with representatives of the local Muslim community.
The agreement signed reflects "mutual recognition and respect of mutual values," added the mayor.
The deal will allow members of the community to take days off work for Muslim celebrations, although they will not receive paid holiday.
It needs to be ratified in the Bremen state parliament, as well as by city authorities. Two weeks ago, the city state of Hamburg signed a similar agreement.
Under that accord, Muslims in Hamburg will have the right to three religious holidays but will have to take them as part of their overall holiday entitlement as is the case for some regionally observed Christian holidays.
Until that point, it was up to employers to decide whether to grant Muslim staff religious days off.