The three defendants, identified as per German practice only as Saleh A. and Mahood B., both 25, and 27-year-old Hamza C., were in the dock accused of belonging to the Isis terror group and planning the attacks in the Düsseldorf old town centre in 2016.
The accused "are believed to have plotted to have two suicide bombers set off explosive vests and then open fire on passers-by with automatic rifles," the Düsseldorf court said in a statement.
The case came to light when Saleh A. went to a police station in Paris in February last year and told officers that he had "a certain amount of information about a sleeper cell that was ready to strike in Germany".
He had been registered as an asylum seeker in the Düsseldorf region in 2013 and Germany requested extradition from France after he turned himself in.
German authorities believe Saleh A. and Hamza C. joined Isis in early 2014 in Syria.
They crossed from Syria to Turkey in May 2014. From there they travelled separately in March and July in 2015 via Greece to Germany.
Prosecutors said the pair planned to finance the attack by selling a video to the Vatican with proof of life of a priest kidnapped by Isis in Syria.
Germany since 2015 saw an influx of more than one million migrants and refugees who mostly travelled overland, the majority via Turkey, Greece and Balkans countries, to seek asylum in Europe's biggest economy.
It has endured a string of attacks claimed by Isis including a rampage by a Tunisian asylum seeker who slammed a truck into a crowd of people last December at a packed Christmas market in Berlin, killing 12 people.
The Düsseldorf trial is scheduled to last at least until December.