The ban follows three weeks of protests outside Hemmingen-Westerfeld School in Hanover by parents who said their children would be boycotting the school until the 56-year-old teacher was transferred.
Lower Saxony's education minister, Rolf Wernstedt, finally agreed that the woman, who teaches maths, music and sport, will not return to the school so that lessons could be resumed. But now the ministry may face a legal battle if it tries to prevent her from teaching in future.
The teacher has already been transferred from five other schools over the past 10 years because of disputes over her membership of the Scientology movement and claims that she has continually promoted Scientology. A ministry spokesman said it would now have to determine if any of the accusations against the teacher had legal weight.
Heinz Klages, chairman of the school's parent-teachers' association, said he didn't think the teacher had had a chance to influence any children because of the boycott. But he said she had given information about the sect to parents.
But Franz Riedl, vice-president of the Church of Scientology in Hamburg, said the strong reaction to the teacher resembled a "witchhunt". He said she had only given information about Scientology to one parent, and then only after a spokesman from an anti-sect commission had given a lecture in the school about the movement.
"We think she is being discriminated against because of her religion. We have advised her to consult a lawyer," he said.
The Hannoversche Allegemeine newspaper said in an editorial that much is at stake if the case reaches court. If the teacher won a legal dispute the Scientologists would have a charter to take their ideology into schools.
Scientology, the movement developed in the United States by L Ron Hubbard in the 1950s and based on his book Dianetics, is becoming controversial in Germany because of its religious claims as well as its methods of financial management.
Earlier this year Bavarian education minister Hans Zehetmair issued a warning to schools against Scientology materials after the book What is Scientology? was sent to a number of schools. Last year Scientologists who had been prevented from setting up schools in Germany opened two schools in Denmark just a few kilometres from the border, using teaching methods established by L Ron Hubbard.
Last week the German Libraries' Institute advised public libraries not to accept books and videos which Scientology members were donating to their branch libraries. The institute warned that the books often did not seem to be about Scientology at first glance.