“That it took 50 years to reach this agreement in the last days is indeed shameful,” said Steinmeier, standing next to his Israeli counterpart Isaac Herzog, together with whom the German leader will be attending a commemorations ceremony in Munich on Monday.
A row over the financial offer previously made by Berlin to victims’ relatives had threatened to sour the ceremony with families initially planning a boycott.
But a deal was finally agreed on Wednesday offering 28 million euros in compensation, and also for the first time sees the German state acknowledging its “responsibility” in failings that led to the carnage.
On September 5, 1972, eight gunmen of the Palestinian militant group Black September stormed into the Israeli team’s flat at the Olympic village, shooting dead two and taking nine Israelis hostage.
West German police responded with a bungled rescue operation in which all nine hostages were killed, along with five of the eight hostage-takers and a police officer.
The Games were meant to showcase a new Germany 27 years after the Holocaust but instead opened a deep rift with Israel.
In 2012, Israel released 45 official documents on the killings, including specially declassified material, which lambasted the performance of the German security services.
Included in the reports is an official account from the former Israeli intelligence head Zvi Zamir who said the German police “didn’t make even a minimal effort to save human lives”.
Steinmeier said he will address some of the German failings during his speech at the ceremony on Monday.
“I will speak about… some misjudgements, some misbehaviours and some errors made during the Games in Munich,” he said.
Herzog said the agreement brings “this painful episode to a place of healing”.
“I hope that from now on, we shall continue to remember, invoke, and most importantly reaffirm the lessons of this tragedy, including the importance of fighting terror, for future generations.”