This letter represents the first direct experimental demonstrations and mechanism proposal regarding abnormal palladium diffusion into germanium (Ge). Our experiments indicated that excess Ge atoms among palladium germanide alloy formation indirectly induce the abnormal out-diffusion of mass palladium atoms into Ge. Consequently, palladium germanide alloy on both n-type and p-type Ge form ohmic-like Schottky junctions. To identify this phenomenon, first-principle calculations and technology computer-aided design simulation were used to evaluate the electrical influence of palladium atoms in Ge. We discovered that the activated palladium atoms in Ge induce large midgap bulk-trap states, which contribute to a severe increment of trap-assisted tunneling current at the palladium germanide/Ge junction.