Andreas Hollstein, 54, mayor of the western town of Altena, was stabbed yesterday evening at a kebab shop by a man who had loudly criticised his liberal refugee policy.
Hollstein said that without two shop employees who rushed to help him, he would "probably not be here today".
With a large bandage on his neck and a wavering voice, Hollstein told reporters that the 56-year-old male assailant had asked him if he was the mayor before pulling the knife and then said: "You let me die of thirst and take in 200 refugees in Altena."
Hollstein, a member of Merkel's Christian Democrats (CDU), said that he believed "a coarsening of the public debate about refugees" had led to the assault.
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"I even received emails today approving of the attack - that says something about the state of our country," he said, adding that he and his family had received repeated threats in recent years.
The assailant was arrested at the scene while Hollstein was taken to a local hospital and, after treatment, released hours later, police said in a statement, referring to an "apparent xenophobic motive".
The snack shop owner, Demir Abdullah, who came to Hollstein's aid along with his son, who was also injured in the attack, confirmed the assailant had specifically targeted Hollstein.
"He asked 'are you the mayor?'... then he reached for his knife and stabbed him in the neck," Abdullah told German television.
Hollstein, whose town won a national award in May for its work with refugees, said Altena had welcomed about 450 people and said he had no plans to reverse his stance.
"I'm going to continue to work for refugees, for those who are already here and for those who are still arriving, for the weak and the strong in our society, like a good mayor should," he said.
The assault revived memories of a knife attack on Cologne's mayor Henriette Reker in October 2015 by a right- wing extremist who was angered at her welcoming stance toward refugees.
The brutal attack came at the height of the influx to Germany, where sentiment is still deeply divided on the country's humanitarian responsibilities and its ability to integrate newcomers.
While most mainstream parties back the principle of Germany taking in people fleeing warzones such as Syria, the backlash led the far-right Alternative for Germany party to win its first seats in parliament in September's general election.
The AfD scored nearly 12 percent of the vote in Altena's electoral district, just below the 13 percent it drew nationally.