Named under privacy laws as Michael P, 40, he admitted making a signalling error and then dialling the wrong emergency number.
His lawyer said he also admitted playing on his mobile at the time.
Michael P told survivors that he was aware he had "burdened himself with huge guilt".
"I would like you to know that my thoughts are with you," he added, in a statement read by lawyers.
Those who died in the crash at Bad Aibling on 9 February were all men aged between 24 and 59. Another 89 passengers were injured.
Prosecutors said Michael P had been playing the fantasy game "Dungeon Hunter 5" on his phone when he allowed the two trains on to a single-track line.
The court heard from one police official that the controller had regularly played on his smart phone while on shift, even though it was banned. Analysis of his phone records showed that his mobile use often corresponded with his working hours.
"He played almost every time," the official said, according to Germany's DPA news agency.
Although the line has a safety mechanism, prosecutors say the controller mistakenly disabled it, sending two commuter trains towards each other. When he tried to warn the train drivers, he then pressed the wrong alarm button, they say.
Michael P is accused of involuntary manslaughter and faces five years in jail if found guilty.
Some of the injured as well as the relatives of those who died were present when the defendant entered the court, wearing a hood to cover his face.
A lawyer representing some of the families described the confession given to the court as a tactical move, because what he had admitted was already proven.
"The really burning question remains unanswered," said Peter Duerr; how intensively had he been playing with his mobile phone at the time, and to what extent had he been distracted?
Although investigators did look into the role of the controller at the time of the disaster, it was only when they sifted through his phone data that he was fully investigated.
A German train controller has admitted two errors that prompted two trains to collide head-on in Bavaria with the loss of 12 lives.