The report marks a significant trend reversal for a country that has recorded nationwide infections in the low hundreds lately.
Health officials in the northwestern county of Guetersloh said they have received a total of 983 test results from workers at the Toennies slaughterhouse in Rheda-Wiedenbrueck. Of those, 326 tests were negative for coronavirus.
Officials ordered the closure of the slaughterhouse, as well as isolation and tests for everyone else who had worked at the Toennies site -- putting about 7,000 people under quarantine.
Since the start of the outbreak, Germany has recorded 188,474 confirmed cases of COVID-19 and 8,844 deaths as of Wednesday. The infection rate declined sharply after authorities imposed nationwide social distancing rules in March and the daily case increase this month has averaged between 300 and 400.
News of the outbreak in Guetersloh came as Chancellor Angela Merkel was meeting with Germany's 16 state governors to discuss progress in tackling the pandemic.
"We are far away from an exponential increase," Merkel told reporters after the meeting, insisting that the country would continue to try to relax restrictions while containing any local outbreaks.
Company officials at Toennies said the outbreak at the slaughterhouse may have been linked to workers taking the opportunity to visit their families in eastern European countries as border controls were relaxed.
The infections pushed the county above the threshold of 50 new infections per 100,000 residents over a week during which local authorities in Germany had to consider new restrictions. Officials decided to close schools and child care centers across the county from Thursday until the summer vacation starts near the end of the month, but chose to avoid a wider-ranging lockdown.
Germany started loosening its coronavirus restrictions in late April and has largely kept infection rates low, though local outbreaks linked to slaughterhouses, church services and a restaurant, among other places, have caused some concern.
The Associated Press contributed to this report.