German police said Thursday that they had "indications that a terror attack" was being planned by Islamists for New Year's Eve in the southern city of Munich.
"Current indications show that a terror attack is being planned in Munich. Please avoid gatherings of people and the Munich and Pasing train stations," police said in a tweet.
Both stations have been evacuated, they said, and train services were no longer running at the two sites.
The attackers have an "Islamist background", police added.
A police spokeswoman also told AFP that they had "reliable information" that the group was planning to act as festivities were well under way on New Year's Eve.
Although the train stations have been evacuated, the spokeswoman said it could not be ruled out that the attackers could seek another target.
Police said on Facebook they were taking the threat "very seriously" and that a large deployment of officers were working to track down the suspects.
European capitals are on high security alert, with Brussels and Paris both scrapping fireworks for New Year's celebrations.
Belgian police were also holding five people over an alleged New Year plot in Brussels.
In Berlin, police presence has been stepped up at the Brandenburg Gate, where hundreds of thousands of people have gathered for festivities.
All large bags and backpacks have been banned from the site of the huge street party.
Days after the November 13 attacks in Paris claimed by the Islamic State group that left 130 dead, German police called off an international football match at the last minute due to a bomb threat.
No explosives were subsequently found, and no arrests made after the Germany-Netherlands friendly in Hanover — which was to be attended by Chancellor Angela Merkel — was cancelled and thousands of fans evacuated.