The suspects, aged 20 to 28, were detained in dawn raids on Tuesday that saw 500 police officers swoop on residences in the cities of Kassel, Essen, Hanover and Leipzig.
Media reports said they were believed to be targeting a Christmas market.
But the Frankfurt public prosecutor said there was "insufficient evidence" they were preparing an attack or were in any way linked to IS, a spokesman told AFP yesterday.
German authorities have been on heightened alert since IS claimed a lorry assault on a Berlin Christmas market last December which killed 12 people.
Earlier this year a man who had had an asylum claim rejected by Germany stabbed one person to death at a supermarket and injured six others in a suspected jihadist assault.
And German police last month arrested a 19-year-old Syrian suspected of preparing a "serious" Islamist-motivated bomb attack.
Disclaimer: No Business Standard Journalist was involved in creation of this content