German police said there was no indication of a "terrorist" link to a car explosion in central Berlin which killed the driver on Tuesday morning and prosecutors said the victim was a 43-year old man previously investigated for drug dealing.

Prosecutors in the capital said they suspected an explosive device had been attached to the car in a murder attack.

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"There is no evidence of there being a terrorist background," a spokesman for Berlin police said.

It was unclear whether the driver, who had a Turkish background, was the target as he was not the owner of the car, said prosecutors. However, police had previously investigated the victim for dealing drugs, forgery and illegal gambling.

The murder squad suspects there is a link to organized crime, said the prosecutors.