Background: Health literacy has recently been proposed as a resource to deal with health-related information during the COVID-19 pandemic. Especially the education sector was affected by the consequences of the pandemic, e.g. through school closures and reopenings by following strict hygiene regulations. During challenging times like these, school principals are the key actors in the school environment. They are not only responsible for school functioning, but school principals’ behavior and attitudes are also associated with health promoting school activities. The present study aimed to assess COVID-19 health literacy levels of German school principals, and to investigate the associations of COVID-19 health literacy with the implementation of health promotion in schools during the pandemic. Methods: As part of the joined studies coordinated by the COVID-HL Network, the COVID-19 Health Literacy School Principal Survey was conducted in Germany from March to April 2021. 2187 school principals and school management team members from four German federal states participated in the online survey. The HLS-COVID-Q22 was used to assess self-reported COVID-19 health literacy. The COVID-19 related HPS implementation scale was used to measure a holistic approach to school health promotion, consisting of 3 subscales: COVID-19 related support for students, staff and school. COVID-19 health literacy levels were computed using Rasch analysis. Multiple linear regression analysis was conducted to examine the association of school principals’ self-reported COVID-19 health literacy and the implementation of COVID-19 related health promotion in schools. Results: School principals showed good self-reported COVID-19 health literacy. Multiple linear regression analysis revealed that self-reported COVID-19 health literacy positively predicted the implementation of COVID-19 related health promotion in schools for all three subscales during the pandemic. In some regression models, the sociodemographic factors age, sex, and school type were also significant factors. Conclusions: German school principals had high self-reported COVID-19 health literacy. School principals’ self-reported COVID-19 health literacy was a significant factor associated with the implementation of COVID-19 related health promotion in schools. The present findings underline the need to investigate the relationship of school principals’ health literacy and other potential influencing factors for the implementation of health promotion in schools.