A special committee of MPs in the Düsseldorf state parliament will meet regularly from Thursday to find out why police were unable to stop the attacks, the Kölner Stadt-Anzeiger reported.
The representatives will also look into the high-ranking police officers who planned the deployment as well as the city politicians overseeing their work.
Chairman Peter Biesenbach, of Chancellor Angela Merkel's Christian Democratic Union (CDU), told the local paper that he wants to call large numbers of witnesses.
But the inquiry may be turned to local political ends, as conservatives have long hoped for an opportunity to unseat state interior minister Ralf Jäger of the rival Social Democratic Party (SPD).
Wheels of justice turn slowly
Police are currently investigating 73 people in relation to sexual assault, theft, and other crimes, with prosecutors telling The Local on Monday that many of the suspects were people who had arrived in Germany in the past year.
“The vast majority of suspects do not have permission to stay in Germany, but this is for different reasons, encompassing people whose asylum applications haven't been accepted and illegal immigrants,” spokesman Ulrich Bremer said.
Police have received over 1,000 reports of crimes ranging from handbags and mobile phones being stolen to rape on New Year's Eve, when large numbers of men of Middle Eastern or north African appearance were reported harrassing revellers, especially women, at Cologne main train station.
But despite massive public and international hue and cry over the assaults – which have deeply marked the refugee debate in Germany – no-one has so far been brought to justice.
The only scalp claimed by the events has been Cologne police chief Wolfgang Albers, who was suspended in the week following the assaults after it emerged that police had deliberately withheld information about the attacks to avoid stoking political tension.