Police are investigating a group of football fans in eastern Germany who celebrated their club's victory by marching through town in Ku Klux Klan-style hoods.

After FC Energie Cottbus won promotion to the third-tier of the German league on Sunday, a group of fans, their faces covered with hoods resembling those worn by the U.S. white supremacist group, marched holding a red banner with "The rise of the evil ones", written in gothic script.

The club called the fans' behavior "inhumane, repugnant and in no way tolerable," and said they faced a life-long ban from its games if identified.

"We are deeply saddened by the fact that a few people, through their actions, spoiled the joy of victory and damaged the image of tens of thousands of Energie fans and the club," it said in a statement.

The use of extreme-right symbols has particular sensitivity in the city of 100,000 near the Polish border where tensions between far-right supporters and refugees escalated earlier this year after Syrian teenagers were detained over two knife attacks.