Thousands of opponents and supporters of Germany's immigration policy have marched through the eastern city of Chemnitz, where tension has boiled over following the killing of a German citizen.

Key points: Protests were sparked by the killing of a German citizen, allegedly by migrants

Protests were sparked by the killing of a German citizen, allegedly by migrants About 8,000 far-right and counter-protesters marched through Chemnitz, police say

About 8,000 far-right and counter-protesters marched through Chemnitz, police say People from both ends of the political spectrum clashed with police

The protests on Saturday (local time) were sparked by the killing of a German citizen, allegedly by migrants from Syria and Iraq.

Some protesters paraded with large portraits of victims of attacks perpetrated, they claimed, by asylum seekers, while others brandished banners reading "Chemnitz is neither grey nor brown" and "The heart rather than hate".

There was a heavy police presence with reinforcements from all over Germany after they were heavily outnumbered by thousands of far-right protesters and hooligans earlier this week.

The latest protest drew about 4,500 far-right protesters and 3,500 counter-protesters, Saxony state police reported before citing security concerns as the reason for ending the event early.

A protester holds a poster with a photo of Angela Merkel reading "Merkel must go". ( AP: Jens Meyer )

The march was stopped several times along the way as counter-protesters blocked the route and the police officers deployed to keep them and the marchers apart flooded into the street.

The opposing camps in Chemnitz clashed on Monday, the day after the fatal stabbing of the 35-year-old German citizen and the arrests of the migrants on suspicion of manslaughter.

Scenes of the vigilantes chasing foreigners in the city's streets have shocked people in others parts of Germany since then.

Police, at times, were unable to control the earlier protests and clashes.

The killing of the German citizen has led to several days of violent protests. ( AP: Jens Meyer )

Leaders of the two groups that combined forces on Saturday night cultivated a different image for the "mourning march," wearing dark suits and carrying white roses.

However, the mood at the event bringing together previously isolated clusters of nationalists — from lawmakers to Hitler-saluting skinheads — darkened as the sun set.

A man holds a white rose as he participates in the march. ( AP: Jens Meyer )

People from both ends of the political spectrum could be seen drinking beer and shouting slurs at police.

The tension in the air reflected the polarisation over Germany's ongoing effort to come to terms with an influx of more than 1 million refugees and migrants seeking jobs since 2015.

The right blames Chancellor Angela Merkel's decision to allow in hundreds of thousands of asylum seekers from war-torn countries like Syria, Iraq and Afghanistan for multiple problems.

Daniel Hillig, a German citizen, was allegedly killed by migrants. ( AP: Jens Meyer )

Some far-right supporters argued before the killing in Chemnitz that migrants were responsible for an increase in serious crimes, especially attacks on women.

The anti-migrant sentiment has been particularly strong in Saxony state, traditional strongholds of groups that sought to inspire a nationwide movement on Saturday night: the Patriotic Europeans Against the Islamisation of the West, or PEGIDA, and the far-right Alternative for Germany party, which has won seats in Federal and State Parliaments with an anti-Muslim platform.

Local police appeared to have been caught unprepared when the slaying triggered the protests, which attracted crowds openly engaging in Nazi veneration and devolved into violence.

A counter-protester holds a sign which reads: "Migration background and German patriot". ( AP: Jens Meyer )

AP/ABC