Thousands of other revelers keep partying at the event in Duisburg, near Duesseldorf, unaware of the deadly stampede that started when police tried to block thousands more people from entering the already-jammed parade grounds.
Police are still trying to determine exactly what happened, but the situation was "very chaotic," police commissioner Juergen Kieskemper said.
He said police closed off the area where the parade was being held because it was already overcrowded. They told revelers over loudspeakers to turn around and walk back in the other direction before the panic broke out, he said.
German news agency DAPD reported the victims were crushed in the large tunnel leading to the event site and that emergency workers had trouble getting to them.
Duisburg city officials decided at a crisis meeting to let the parade go on to prevent more panic and another stampede, said city spokesman Frank Kopatschek.
"The crisis meeting determined not to stop the event because at the moment there are too many people on the grounds," he said.
The original Berlin Love Parade grew from a 1989 peace demonstration into a huge outdoor celebration of club culture that drew about 1.5 million people at its peak in 1999. But it suffered from financial problems and tensions with city officials in later years, and eventually moved.