BERLIN—The European Court of Human Rights says it has dismissed a lawsuit by Greek relatives of Nazi massacre victims seeking compensation from Germany.

The Strasbourg court said in a statement Wednesday that the case was inadmissible because German courts—which previously rejected the compensation claim—had properly taken into account national and international law.

The four Greek plaintiffs, then minors, survived a massacre committed by Nazi troops in the village of Distomo on June 10, 1944, that left 218 people dead. It was one of the worst World War II atrocities in occupied Greece.

Germany argued that it settled reparation cases in postwar agreements and is entitled, as a state, to immunity from individual claims under international law.