A spokesman for Cologne police confirmed on Friday morning that a breathalyzer test had shown up positive for the driver. Police are yet to release the results of a blood test.
The 55-year-old driver steered a tram of the Line 18 into another tram which was already stopped at the Eifelwall station.
The impact was so fierce that it smashed the window panes and pushed the back of the front tram off the tracks.
One of the passengers on the tram was reportedly seriously injured but his situation is not believed to be life threatening.
The Cologne Transport Company (KVB) said that it has never had a similar incident in its history.