According to the figures from the federal statistics office, 519,300 more people arrived in Germany in 2014, a 6.8 percent increase compared to 2013.
Sixty percent of the new immigrants came from European Union member states with the highest number coming from the bloc's poorest nations -- the number of Romanians increased by 87,945 or nearly 33 percent followed by an increase of 36,435, or almost 25 percent, in the number of Bulgarians.
A significant number of the immigrants -- 61,295, a rise of almost 108 percent -- were fleeing fighting in Syria.
The rise in the number of immigrants last year was the third highest on record, behind only the post-reunification years of 1991 and 1992.
Around 8.2 million foreigners are registered in Germany, the largest number since the country started keeping records in 1967.
Germany, Europe's top destination for asylum seekers, saw 200,000 asylum requests in 2014, a 60 percent rise since the previous year. The country is also the world's number two destination for migrants after the United States.
Immigration is currently being vigorously debated in Germany, Europe's top economy which had a 81.1 million population by the end of 2014.
The influx of immigrants has led to a rise in anti-refugee and anti-Islam sentiments, particularly in the east, where in Dresden multiple rallies have been organised by the anti-Islamisation PEGIDA movement.
Last week, a mayor of an eastern village resigned under pressure from a far-right protest outside his home against housing plans for asylum-seekers.