Officials had said they were tipped off about a plot by the Islamic State group to strike at the southern German city shortly before midnight as Europe prepared to ring in the New Year in an atmosphere of unprecedented security.
European capitals have been on high alert since November when IS jihadists slaughtered 130 people in a series of gun and suicide attacks in Paris, stoking fears new assaults could happen over the Christmas and New Year holidays.
But German investigators, acting on information from "friendly countries" including France, said they have so far failed to substantiate the threat.
"Overall I would say that the situation for Munich is as it was before this threat of attack," Munich police chief Hubertus Andrae told journalists on Friday.
Investigators had in hand the names of some of the "five to seven" suspects allegedly planning to blow themselves up at locations including Munich's main rail hub and Pasing station in the western part of the city, he said, but have not yet found any evidence.
"We have examined data relating to these names, but at the moment, we do not know if these names are correct, whether these people exist and where they are," he said, adding that the suspects were allegedly from Iraq and Syria.
A deployment of 550 officers overnight has now been reduced to 100, and Andrae urged the public to "live as you did before".
Nevertheless, the police chief refuted speculation that the threat was a false alarm, saying that "if there is such information, we have to act".
Interior Minister Thomas de Maiziere thanked Bavarian authorities for their action, warning in a statement that the security situation in Europe and Germany "remains serious in the New Year".
"Security agencies continue to expect a high threat stemming from international terrorism," he said.
- Police warn via Twitter -
Just over an hour before the New Year, police ordered the evacuation of the two stations over a possible "terror attack", issuing alerts via Twitter in several languages.
Rail services at both stations were immediately suspended and police urged the public to avoid large gatherings. Both stations later reopened at around 3:30am, but police called for vigilance.
Regional broadcaster Bayerischer Rundfunk said the suspects were seven Iraqis living in Munich who were allegedly planning to work in pairs and blow themselves up at the two stations as well in other parts of the city.
Bavarian Interior Minister Joachim Herrmann revealed that the crucial tip-off had come from France, as he underlined that "the French do not make up this sort of information".
US authorities had also earlier warned that a plot was being hatched, Bayerischer Rundfunk said.
The Munich-daily Sueddeutscher Zeitung as well as broadcasters WDR and NDR said the first tip-off came as early as December 23, but contained few details.
German intelligence agents were subsequently able to interview an informant in Iraq and French authorities also provided further information, the media said.
The alert brought an eerie silence to Munich's busy rail hub, which over the summer made headlines for the massive turn-out of volunteers welcoming record numbers of refugees to Germany.
Police, including some in riot gear, were stationed overnight at the entrances to the station. Revellers seeking to access the site were turned away.
Meanwhile across Europe, public celebrations went ahead as planned but under the watchful eye of thousands of police and security forces.
- Belgium also targeted? -
With fears of a fresh attack high, both France and Belgium scrapped the traditional New Year fireworks displays in their respective capitals, with Brussels saying it had information about an alleged jihadist plot to attack "emblematic sites" over the holiday.
Ahead of the celebrations, Belgian police carried out several raids in Brussels and the eastern city of Liege in connection with the alleged plot.
Several days after the November 13 Paris attacks, German police called off an international football match at the last minute, evacuating thousands of fans from the stadium over a "serious" bomb threat.
Although an investigation was opened, no explosives were found nor arrests made.
De Maiziere -- who had been due to attend the match with Chancellor Angela Merkel -- later said the event was cancelled "to protect the population", but did not provide specifics.