The app, known as "Gastro-Ampel" (Gastro Traffic Light), produced by the North Rhine-Westphalia Consumer Protection Office, displayed a green, amber or red rating for restaurants based on their hygiene.
But the Düsseldorf Administrative Court said it didn't provide concrete enough facts on how clean each establishment may be and must be withdrawn.
The presiding judges in Düsseldorf said that "potential customers are warned whether or not to try out an establishment without knowing specifically why."
By January, 25,000 people had already downloaded the tool.
But four separate restaurants came together to bring their case against the project before the courts.
It is not yet known whether the Consumer Protection Office plans to bring out a new version addressing the judges' concerns.