The attacker Gundolf Köhler was among those killed when his bomb exploded in a rubbish bin at the entrance to the beer festival, in one of the deadliest attacks in Germany's post-war history.
Investigators initially assumed the 21-year-old Köhler was a depressed geology student who had acted because of relationship problems and exam stress, downplaying his known links to the right-wing scene.
But further revelations about the extent of Köhler's involvement with the far right in the years that followed and speculation he may not have acted alone prompted prosecutors to reopen the investigation in 2014.
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They have now definitively concluded that the attack was a carefully planned, politically motivated “far-right act of terror”, the Süddeutsche daily said, quoting a senior investigator.
Köhler notably trained with the banned neo-Nazi militia group “Wehrsportgruppe Hoffmann” (Hoffmann military sports group) whose members had repeatedly been accused of far-right violence.
Köhler also had “a picture of Hitler hanging above his bed” and wanted Germany to return to Nazism, according to Süddeutsche newspaper.
A memorial set up for the victims of the attack with the motto “We must not forget” at the Oktoberfest grounds in Munich. Photo: DPA
After interviewing over a thousand witnesses and combing through 300,000 documents, investigators believe Kölher aimed for the attack to be blamed on the far left in the hopes of influencing that year's general election and allow a conservative candidate to become chancellor.
Prosecutors did not however find evidence of any accomplices.
“There weren't sufficient indications for the involvement of other people either as accomplices, instigators or helpers,” the Tagesspiegel daily quoted the federal prosecutors' office as saying.
Forty years later, many questions “will probably remain unanswered in Germany's most devastating right-wing terrorist attack to date”, Spiegel weekly said.
The end of the probe comes as Germany confronts a rise in racist, anti-Semitic violence that has left authorities vulnerable to criticism that they have long overlooked the danger posed by the extreme right.
A known neo-Nazi is currently on trial accused of shooting dead pro-refugee politician Walter Lübcke last year.
Last October, a gunman killed two people in an attack on a synagogue in the eastern city of Halle.
In February this year, another gunman shot dead nine people of migrant origin in the central town of Hanau.
Interior Minister Horst Seehofer has since declared far-right extremism the “biggest security threat facing Germany”.