Priests at the Würzburg seminary in northern Bavaria were tipped off at the end of May about far-right behaviour from some of their 18 trainees.
The student priests were suspected of carrying out Nazi rituals, celebrating Adolf Hitler's birthday in a beer cellar and telling anti-Semitic jokes during meetings.
Head of the seminary Herbert Baumann, who supervises young priests as they prepare to serve parishes in Würzburg and Bamberg, immediately called for an in-depth investigation into the matter.
On Wednesday the investigation committee released the 204-page report, which stated that of the four trainee priests under suspicion, two have been removed from the course. A decision is yet to be made on a third.
Both were found to have made anti-Semitic jokes, in which they “made fun of the factory-like slaughter of Jewish children, women and men during the Third Reich,” head of the investigation panel Norbert Baumann told a press conference, broadcaster Bayerische Rundfunk said.
The trainees also were found to have imitated Hitler and greeted each other with the Hitler salute, reporters at the conference heard. Yet the court found no evidence confirming they had celebrated the dictator's birthday.
The now-ex-trainees also attended the concert of German rock band Frei.Wild in April - without informing the seminary. The band is believed to have links with the far-right neo-Nazi scene.
However, Baumann stressed there was not “a brown network or brown cesspool in the Würzburg seminary.”
“The Würzburg seminary distances itself from any form of political extremism, antisemitism, racism and xenophobia," wrote the seminary in a statement on its website put up on June 1st.
"Such attitudes are are completely incompatible with the services and life of Catholic priests."