The United Nations' highest court has ordered Italy to annul all compensation claims against Germany for Nazi war crimes committed during World War Two.

The International Court of Justice ruled Friday that Italy's courts were wrong to allow victims of Nazi atrocities to claim compensation from Germany, because it has legal immunity from lawsuits in foreign courts.

The Hague-based court said Italy's top court violated Germany's sovereignty under international law, for its ruling in 2008 that Germany should pay compensation to victims of war crimes committed by the Third Reich from 1943 to 1945.

Friday's decision is expected to end a series of lawsuits stemming from Nazi abuses committed in Italy, after Rome joined the Allied powers in 1943.

Rulings by the International Court of Justice are final and binding on states.

One of the cases involved an Italian who was deported as a forced laborer to Germany in 1944. The man, Luigi Ferrini, claimed compensation from Germany after an Italian court ruled in his favor in 2004.