[2] After the war his Thuringian home found itself in the Soviet occupation zone of Germany which was in the process of mutating into the German Democratic Republic, politically separated both from West Germany and from those parts of the former country which, following the border changes agreed by the Potsdam conference now found themselves in Poland and the Soviet Union.

From 1949 he also sat as a member of the national Volkskammer (Peoples' Chamber) and served as East Germany's Minister for Trade and Supplies.

[1][2] Hamann's ministerial responsibilities for trade and supply proved impossible to accomplish in a state that was becoming increasingly isolated,[2] especially after reforms which left East and West Germany with different currencies.

[2] Like others in the LDPD he placed all his hopes in a rapid reunification of the country which would reverse the anti-democratic and illiberal measures being implemented by the East German government under Walter Ulbricht.

[2] In 1952 Hamann was arrested, because he had "systematically sabotaged the people's welfare" ("planmäßige Versorgung der Bevölkerung sabotiert").

In May 1990 the successor organisation to the LDPD, the short-lived Association of Free Democrats, formally rehabilitated Karl Hamann.