Bild newspaper reported a man knifed passers-by at random at the festival at around 9:45 p.m. (1945 GMT) and that at least three people were dead and multiple people wounded.
Witnesses said the perpetrator was at large, the paper said.
The mayor of the city confirmed there were dead and injured due to an attack, but did not go into details.
"It tears my heart apart that there was an attack on our city. I have tears in my eyes when I think of those we have lost. I pray for all those who are still fighting for their lives," Mayor Tim-Oliver Kurzbach said in a statement.
The police said the attack occurred at a festival to honour the town's 650th anniversary.
"There are multiple dead and injured due to a knife attack," the police said in a post on X.
Local police said they could not comment over the phone.
The attack occurred at the Fronhof, the mayor's statement said, a market square where live bands were playing.Solingen is in North Rhine-Westphalia state, Germany's most populous and bordering the Netherlands.
Fatal stabbings and shootings in Germany are relatively uncommon.
In June, a 29-year-old policeman died after being stabbed in the German city of Mannheim during an attack on a right-wing demonstration.
There was a stabbing attack on a train in 2021, injuring several.
The German government has been aiming to toughen rules on knives that can be carried in public by reducing the length allowed.
