The ambassador unveiled a plaque commemorating the project and also opened to public view the restored papier mache ceilings inside Dewan-e-Khaas, an official spokesman said.
Naeem Akhtar, Jammu and Kashmir Minister for Education was present on the occasion.
The Ambassador said that since 1981, Germany has spent more than Rs 400 crore on 2650 projects aimed to preserve cultural heritage in 144 countries.
In India alone, more than 50 such projects have been undertaken and Rs 22 lakh Diwaan-e-Khaas project has now been added to the renowned list of such heritage sites in India, he said.
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Shalimar Bagh, along with six other Mughal gardens of Kashmir, is on UNESCO's tentative list of World heritage sites since 2010.
Dewaan-e-Khaas is located on the fourth terrace in the erstwhile women's quarter of the garden and positioned in the middle of the terrace amid a pool of water replete with an array of as many as 120 fountains.
With a view to seek financial support and expert assistance for restoration of Dewan-e-Khaas, INTACH (National Trust for Art and Cultural Heritage) Kashmir chapter made a proposal to the German Embassy to help and support a restoration project for Dewan-e-Khaas.