The cause of the blaze is still unclear but "all indications" suggest it could be a case of arson.
ADVERTISEMENTFirefighters battling a large forest fire near Berlin had stopped its spread on Friday, a local official said, warning the danger from the blaze had not yet passed.
"The situation has not yet calmed down," a spokesman for the interior ministry of Brandenburg state told the DPA news agency.
The cause of the fire was initially unclear, but authorities announced on Friday evening that "all indications" now suggest that the fire could have been caused by "arson", according to German broadcaster Deutsche Welle.
Around 600 people fled their homes in three villages in Brandenburg 50-kilometres southwest of the capital late Thursday as firefighters battled the blaze from the air with water-bombing helicopters.
The smell of acrid smoke reached Berlin as more than 400-hectares of woodland burned outside the nearby city of Potsdam. Residents of one of the villages were able to return home late Friday, but those from the other two will not be able to do until Saturday.
About 440 firefighters will be deployed to beat back the fire over the weekend when no rain has been forecast and strong winds could increase the fire's intensity.
Efforts to contain the fire were complicated because the affected terrain is still littered with munitions from World War II, regional emergency response coordinator Michael Knape told public broadcaster RBB.
He called the situation "dramatic", saying there had already been small explosions from ordnance buried in the ground.
An enduring drought and heatwave have left European rural areas particularly vulnerable to wildfires, which wrought devastation in Greece and Sweden earlier this summer.
As the flames came within 100-metres of one of the German villages, residents were told to take only the most essential belongings like medication and documents before fleeing.
Emergency hotline operators received hundreds of calls from residents of Berlin saying they could smell smoke.
"The entire urban area is now affected. The cause is the large fire in Brandenburg," the Berlin fire brigade tweeted.