The area known as the Fasanengarten, or pheasant garden, has been closed off to protect the public, the Stuttgart authorities announced on Friday.
The caterpillars, which turn into oak processionary moths, are covered in fine hairs which have tiny hooks on them, and a poisonous substance which can provoke allergic reactions in people.
These can range from sting-like red lumps, to dizziness, fever and in extreme cases, to allergic shock.
The area will be closed to people for at least a month.
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