It's indeed a wind tunnel. It's a research facility, the "Luftfahrtforschungsanstalt Hermann Göring" in Völkenrode near Brunswick. That facility was built in 1935 and ended operations in 1945. After the war the compounds hosted an agricultural research facility, the "Bundesforschungsanstalt für Landwirtschaft Braunschweig-Völkenrode" and the "Die Physikalisch-Technische Bundesanstalt", the national institute for natural and engineering sciences, particulary meteorolgy.
The facility had three tunnels, A1 (completed 1937) had a diameter of 2.5 -3m, A2 (completed 1939 but only operational from 1942 on) was a high speed wind tunnel for testing parts and models of rockets, missiles & jets, and the giant A3 (depicted above, completed 1940) with 8m diameter and speeds up to 350 km/h.