Authorities did not say whether the three had planned specific targets and offered few details, but security officials said that all three suspects were of Moroccan origin. They also said that two were arrested were in the western German city of Duesseldorf and one in nearby Bochum. The arrests were based on suspicion they were planning a terror attack, they said.
Local media reported that officers had seized large amounts of explosives when the three were arrested.
The arrests "succeeded in averting a concrete and imminent danger, presented by international terrorism," German interior minister Hans-Peter Friedrich said in a statement. They showed "Germany remains a target of international terrorists."
Germany has escaped any large-scale attack by an Islamic terror organisation, such as the Madrid train bombings of 2004 and the London underground attacks of 2005. But Germany's presence as part of the Nato coalition in Afghanistan has sparked anger and at least two major plots have been thwarted or failed in Germany before they could be carried out.
The suspects had been under surveillance since November when Germany increased security across the country in response to heightened terror threat warnings in Europe, but authorities only had enough evidence to launch an official criminal investigation starting 15 April, Friedrich said in a statement.
Federal prosecutors said earlier that they had ordered federal police to arrest the trio, but gave no further information about the timing or location of the arrests. Officials were planning a news conference for Saturday.
A US official speaking on condition of anonymity said a team picked up three people in a raid on suspicion they were planning an attack with explosives.
"Our concerns about threats in Europe had a number of different threads and strands, some of which have been disrupted by good intelligence and law enforcement work by the relevant services," another US official said.
"There have been five disrupted plots in Europe during the past four years including a credible plot in Germany in 2007 all of which demonstrate Pakistan-based al-Qaida's steadfast intent to attack the US and our allies."
Duesseldorf, a city of 600,000, has one of the largest Moroccan immigrant communities in Germany. It is to host the Eurovision Song Contest on 14 May, which is expected to draw hundreds of thousands of spectators.
Prosecutors said the three alleged terrorists would be brought before a judge Saturday who will decide whether they are to remain in detention pending a trial.
Germany raised its security posture in November after receiving information from its own and foreign intelligence services that led authorities to believe a sleeper cell of some 20 to 25 people may have been planning an attack inside the country or in another European nation.
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