At least nine people were killed during a terrorist shooting committed by an 18-year-old German-Iranian man whose motive is still "fully unclear," police chief Hubertus Andrae said early Saturday.
"The question of whether this was terrorism or a crazed rampage is linked to the motive, and we cannot say anything about that yet," Andrae told a news conference.
The man was carrying a pistol and a red rucksack when he started shooting in a McDonald's restaurant at 5:52 pm (1552 GMT) at the Olympia shopping centre in Munich.
There are children among the victims and three of the 16 people injured in the shooting remain in critical condition, Andrae said.
Two men initially suspected as accomplices in the shooting who had left the scene in a car were later interviewed and cleared, police said.
The teenager, who held dual German and Iranian citizenship and had lived in Munich for more than two years, shot himself dead about 1 kilometre away from the shopping centre. His rucksack was examined for explosives, but police didn't say whether any were found.
The shooting triggered a series of evacuations and a widespread state of panic across the southern German city. Public transportation was temporarily suspended and residents were asked to remain inside their homes.
The Bavarian parliament and rail operator Deutsche Bahn were among those to open their doors to residents unable to reach their homes for cover.
Munich authorities activated the country's elite counter-terrorism units GSG 9 and BFE+ and asked for reinforcement from police units across the country for the purpose of the manhunt.
Police refuted reports in German media about a related incident at Karlsplatz, a plaza also known as Stachus, near the city centre and about 5 kilometres from the Olympia shopping centre.
Germany's national security council, headed by Chancellor Angela Merkel, will meet in Berlin on Saturday, her chief of staff Peter Altmaier said. Interior Minister Thomas de Maiziere, Germany's top security official, was returning from the United Sates to attend.
Germany has been on high alert since Monday, when an Islamist asylum seeker injured five people in a knife-and-axe attack on a commuter train headed to the southern city of Wuerzburg.