Italy's highest appeal court, the Cassation, ruled that Germany must pay compensation to nine people whose relatives were killed by the Nazis in a 1944 massacre.
The ruling marks the first time an Italian court has made the German state liable in a penal case for damages resulting from war crimes perpetrated by Adolf Hitler's troops in Italy during World War II, Italian news reports said.
The case relates to the killing of 203 civilians near Civitella, a town in Italy's central Apennine mountain region, on June 29, 1944.
The Rome-based court's ruling came following a hearing in which a lawyer representing Germany, Augusto Dossena, stated that his client was exempt from such payments under agreements signed by the Rome and Berlin governments in 1947 and 1961.
"Germany does not question the responsibility of its soldiers and officers who tarnished themselves with ferocious war crimes," said Dossena, who, according to the ANSA news agency, also explained that Berlin has made past payments amounting to 800,000 euros ($1.07 million) in connection with the Civitella massacre.
But Dossena said ordering Germany to pay damages would violate international agreements and pave the way for thousands of people to seek war crime compensation on an individual basis.