Ahmad Alhaw "declares that he takes responsibility for the very serious crimes he committed, and explicitly recognizes his guilt regarding all the charges," the defendant's lawyer Christoph Burchard told judges in the high-security courtroom.
Alhaw took a 20-centimetre (eight-inch) knife from the shelves of a supermarket last July, using it to kill one and wound six in the assault. He was arrested after passers-by overpowered him.
Charging him with murder, as well as six counts of attempted murder and grievous bodily harm, prosecutors said he acted with a likely Islamist motive.
He told interrogators that the crime "had some connection with events on the Temple Mount" in Jerusalem, where Israeli authorities had recently imposed access controls for Muslim worshippers, prosecutor Yasemin Tuz told the court.
"The results of the investigation show that the accused sought out his victims indiscriminately, retaliating against people who in his view represent perpetrators of injustice targeting Muslims," prosecutors had earlier said.
"It was important to him to kill as many German nationals of the Christian faith as possible. He wanted his actions to be viewed in the context of an Islamist attack, and understood as a contribution to jihad worldwide," they added.
Investigators, however, did not find any evidence to suggest that Alhaw was a member of the Islamic State (IS) group.
Rather, the defendant -- a tall, slim, bearded figure who appeared in court wearing glasses and a blue turtleneck -- had from time to time demonstrated "suspect behaviour", "transforming" his life towards radical Islam before "again taking up a Western lifestyle," Tuz said.
'Fascinated' by the West
Through an Arabic translator, Alhaw told the court he had sought asylum in Norway in 2009 after giving up dentistry studies in Egypt, hoping for a better life in Europe.
After his application was rejected, he moved around the EU, living in Sweden, Spain and finally Germany.
He was "fascinated" by the Western lifestyle and enjoyed drinking alcohol, with only "phases" of religiosity, Alhaw said.
But "he had the feeling that he was not welcome in these countries," he added.
Alhaw himself declined to discuss his suspected religious radicalization or details of his crimes.
"He knows that he has committed very serious crimes and knows he will be sentenced for them," defender Burchard said.
Sequence of attacks
The killer risks life in prison, although Germany often grants parole after 15 years.
Hearings began after he was deemed psychologically fit for trial.
National news agency DPA said Alhaw had allegedly signed a statement during interrogation saying: "Yes, I am a terrorist."
The trial is expected to last until March 2nd, with the six people wounded in the assault invited to the hearings only from January 26.
The assault in the northern port city was the first Islamist attack in Germany since Tunisian Anis Amri drove a truck into crowds at a Berlin Christmas market in December 2016, killing 12 and injuring 48.
Amri was shot dead by police in Milan four days later, and the rampage was claimed by the Islamic State group.
Germany has been on high alert over the threat of a jihadist assault since that truck rampage.
Like Amri, Alhaw was to have been deported after his asylum application was rejected by authorities at the end of 2016, but the process was held up by a lack of identity documents.
The attacks have piled pressure on Chancellor Angela Merkel over her decision to allow in more than a million asylum seekers since 2015.
Railing against the migrants, the Islamophobic party AfD won over 90 seats in September's general elections -- the best showing for a far-right party in Germany since the end of World War II.