A police spokesman in Leer, Lower Saxony said on Thursday that the driver was being investigated for an administrative offence, with the fine possibly rising to €10,000.
The woman was pregnant when the driver refused to let her onto the bus for wearing the conservative Islamic garb, the spokesman said, adding that her husband had reported the driver to local authorities.
The private bus company, which had been contracted by the city of Emden to run the local bus service, has admitted that the driver's actions breached local regulations.
The company claimed that the driver had acted out of ignorance.
“This type of thing cannot be allowed to happen and must not be repeated,” said Temmo Poppenga from the Emden city authority.