In an surprisingly open match, Australia had the better of the first half but were stunned by a fightback after the interval.
The first half was played at searing pace, matching the temperature down on the pitch in the baking afternoon sun, with both sides intent on attacking.
Australia created more of the chances but in terms of conversions it was honours even at the break.
Mark Knowles sent a reverse-stick effort across goal and wide before Germany had a penalty corner downgraded to a free-hit as Christopher Zeller was adjudged by the video umpire to have been fouled outside the circle.
When they did win their first corner, Zeller hit straight at goalkeeper Nathan Burgers, but two minutes later the Kookaburras went ahead.
A quick break down the left allowed Glenn Turner to cut in and shoot and Max Weinhold could only parry the ball into the air. When it dropped, Kieran Govers smashed it in on the first bounce.
Within five minutes Germany were level through Moritz Fuerste's low penalty corner, which the unsighted Burgers could not keep out.
Oliver Korn sent a shot just wide early in the second half but Australia were much sharper in front of goal and when both Jamie Dwyer and Eddie Ockenden had shots saved by Weinhold, Turner converted from close range.
It is 50/50 every time we play Germany and they got the better of us at the end today.Ric Charlesworth
The game became tense, which suited the Kookaburras with their lead, and Germany's frustrations increased when what would have been goal of the tournament for Oskar Deeke was ruled out.
Korn's aerial ball from almost the halfway line was controlled superbly by his team-mate, keeping it up in the air twice before hooking over Burgers only for the video umpire to rule his stick was too high.
But while Zeller was in the sin-bin, Germany equalised with a helping hand from their opponents.
Possession was given away to Tobias Hauke in the inside-left channel and his perfect pass picked out the unmarked Matthias Witthaus to score with an early shot.
Better was to follow as Timo Wess converted a penalty corner and, as Australia pushed for an equaliser, a sliding Florian Fuchs converted Benjamin Wess' cross on the counter-attack to stun Australia.
Germany coach Markus Weise said: 'Both teams did not have many chances, which is quite an achievement against Australia because usually you have to defend against 20 different chances.
'It was a super game for us.'
Australia coach Ric Charlesworth said: 'It is 50/50 every time we play Germany and they got the better of us at the end today.
'It is very disappointing for the players and all of us but we play sport and each time you play there is a winner and a loser and we came up short today.'