According to prosecutors in Hannover Christian Wulff, who resigned as president in February 2012 amid a corruption scandal, allowed film producer David Groenewold to pay part of his hotel bill for him and his wife during a trip to the Oktoberfest in Munich in 2008.
Spiegel Online news website reported that Wulff then allegedly supported one of Groenewold's film projects by writing a letter to help him get funding.
A court in Hannover decided on Tuesday morning that it would proceed with the case against Wulff for accepting the money. It has presented its reasons in a 14-page document, Spiegel Online reported. The trial is set to start on November 1.
The charge of accepting favours while in office carries a maximum penalty of three years' jail and a fine under German law.
The accusations were reduced from the more serious corruption and bribery
charges which had been demanded by prosecutors and carry up to five years'
In April prosecutors filed corruption charges against Wulff, a prominent figure in Angela Merkel's party, the CDU, until his resignation.
The 54-year-old, who has strongly denied the accusations, has vowed to fight the claims in court in a bid to clear his name. He has opted to face a trial rather than paying a fine.
The case against Groenewold and Wulff involved four prosecutors, 24 police officers, 20,000 pages of documents and more than 100 witnesses, Spiegel Online reported.
But the hotel bill is the only aspect of the corruption scandal which prosecutors are proceeding with.
Groenewold allegedly paid for part of the bill in the five-star Bayerischer Hof hotel. As premier of Lower Saxony, Wulff then allegedly wrote a letter in support of Groenewold's project.
Wulff was appointed to the largely ceremonial post of president in July 2010.