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The boy, born in the same town in 2004, was "strongly radicalised" and apparently instructed by an unknown IS member, Focus reported.
The suspect put down a backpack containing a self-made nail bomb at the Christmas market on November 26, but the device did not go off because the detonator failed, it said.
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A market visitor called the police after finding the backpack and specialists defused the device, the report said.
Police identified and arrested the boy, who is now in a youth detention center, the report said, adding that the Federal Public Prosecutor had taken over investigations on the charge of a serious act of violent subversion.
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A spokesperson at the Federal Public Prosecutor Office in Karlsruhe was not immediately available for comment.
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