Steinmeier spoke alongside Israeli President Isaac Herzog, who is visiting Germany ahead of the 50th anniversary of the attacks which led to the death of 11 Israelis, one German police officer and five Palestinian gunmen in 1972.
Germany and Israel reached an agreement only last Wednesday.
"That it took 50 years to reach this understanding of the last days, that is indeed shameful," Steinmeier told a news conference.
At the end of last month, Germany reached an agreement on further compensation for the families of the Israeli athletes murdered at the games.
The families had said they were unhappy with the latest German compensation offers and that they planned to boycott the ceremony on Monday marking the 50th anniversary of the attack in protest.
The Frankfurter Allgemeine newspaper, citing Germany's news agency DPA, said compensation of 28 million euros ($28.02 million) had been discussed, of which the federal government would cover 22.5 million euros.
The German government did not confirm the amounts, saying the talks with the victims' representatives were confidential.
Steinmeier and Herzog are scheduled to lay wreaths in Munich on the anniversary of the attacks. German Chancellor Olaf Scholz will also meet Herzog during his three-day state visit. Herzog's late father, Chaim Herzog, was the first president of Israel to officially visit Germany in 1987.
Herzog also addressed the threat his country feels is posed by the Iran nuclear deal, which is currently being re-negotiated in Vienna after the US withdrew in 2018. Israel opposes the deal.