The patient was a 54-year-old farmer who lost his limbs in an accident six years ago.
The donor is believed to be a teenager who had died shortly before the surgery. Neither man's name has been released by the Munich clinic.
The 15-hour operation took place last week, and the patient is recovering well, though it could be two years before he can move his new hands.
Arm transplants have been carried out before - the first occurred in Austria in 2003 when a man received transplanted forearms and hands.
In this procedure, limbs were reattached just below the shoulder.
Reiner Gradinger, medical director at the Munich University Clinic where the operation involving 40 doctors, nurses and assistants took place over 15 hours last week, said: "The reattachment appears up to now to have proceeded optimally."
Surgeon Edgar Biemer said the greatest challenge was establishing blood flow between the farmer's body and muscles in the new arms because the muscles have a limited lifespan.
And he said: "We discussed with the patient that he would have to deal with the fact that his hands were from somebody else.
"But this was discussed before the first heart transplant, and in reality nobody really cared about that."
Doctors are monitoring the patient closely to make sure his body does not reject the new limbs.
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