Merkel herself wanted to know about the matter from Hasina during the bilateral meeting Hotel Bayerischer Hof in Munich on Saturday, the PM's Press Secretary Ihsanul Karim told the media.
Hasina told her that Bangladesh gave shelter on humanitarian grounds to the Myanmar nationals who entered the country illegally.
"They were in bad condition after arriving in Bangladesh," Karim quoted Hasina as saying in the meeting.
Hasina said a place had been fixed for them and they will be kept at the place 'temporarily'. They will be given all sorts of facilities until repatriation to their own country, she added.
"She has sought the support of the international community for this," Karim said.
The remote Thengar Char island in the Bay of Bengal, where Bangladesh authorities plan to shift the Rohingya refugees, is not yet considered fit for human habitation.
It takes two hours to reach Thengar Char by boat from the nearest human habitation in the coastal district of Noakhali.
The Bangladesh Forest Department, however, says it can be readied for habitation within a short time with proper logistical support.
Merkel praised Hasina for Bangladesh's socio-economic progress, according to the PM's press secretary.
She also expressed hope that the trade ties between the two countries will strengthen further in the future.
Hasina spoke about Bangladesh's achievement in the field of economy and development.
The two leaders also discussed gender issue and women empowerment, Karim said.
"Our honourable prime minister told the German chancellor about the government's efforts and success in women empowerment," he said.
They also discussed the elimination of poverty and progress in education.
Hasina called for German investment in Bangladesh, noting the plan to set up 100 special economic zones and a high-tech park. She said the German firms could take advantage of those initiatives.
Speaking about her government's 'zero tolerance' policy towards terrorism, Hasina said, "The two countries will work together in this field."
Karim said the German chancellor accepted Hasina's invitation to visit Bangladesh.
She also expressed gratitude recalling German support in Bangladesh's struggle for independence.
Foreign Minister AH Mahmud Ali, PM's Principal Secretary Kamal Abdul Naser Chowdhury and Foreign Secretary Shahidul Haque were also present at the meeting.
After the meeting, Bangladesh and Germany signed a memorandum of understanding (MoU) on upgrading current machine readable passport system of Bangladesh and a Joint Declaration of Intent (JDI) on political exchange on counter terrorism.
Home Secretary Kamal Uddin Ahmed and German state-run Vridos GmBH CEO Hans Wolfgang Kunz signed the e-passport MoU.
The JDI was signed by Foreign Ministry Director General (Europe) Mohammad Khorshed Alam Khastagir and Ambassador Patricia Flor, Director-General for International Order, United Nations and Arms Control, German Federal Foreign Office.