The incident took place at around 10.20 pm on Saturday on the Theresienwiese, the area of land in the south of the Bavarian capital where Oktoberfest is held every year, police report.
The 32-year-old Brit got into a fight with an electrician from Munich who was six years his junior.
Both men were celebrating at the Frühlingsfest (spring festival), which takes place in Munich during the last two weeks of April.
According to the police report, the Brit made the first move, wrapping his arms around his German adversary. The Munich man managed to free himself and responded by punching the Brit in the face.
The punch knocked him straight to the floor and he hit his head on the ground. He was taken to hospital with injuries so severe that they were considered life-threatening.
Meanwhile, the 26-year-old German was arrested and delivered to the local police station. A criminal investigation has now been opened.
On Monday afternoon, police conformed to The Local that the British man's condition was still potentially life-threatening.