By employing PBE and B3LYP, we report a density functional theory (DFT) and TDDFT investigation of X-terminated Ge nanoclusters (where X = bromine (Br), chlorine (Cl), fluorine (F), hydrogen (H), Amino (NH2) and hydroxyl (OH)). This research reveals that surface conditions considerably change the cohesive, structural, optical, and electronic properties of germanium nanoclusters, which plays a key role in the development of nano-devices, for instance, FETs, sensors, etc. We demonstrate that full coverage of nanocluster’s surface with the above-mentioned passivants/functional groups can reduce the HOMO–LUMO gap (and optical gap), for example, up to 1 eV of [110] Ge nanoclusters of 1.5 nm diameter. The following order of magnitude of the electronic gap is observed: H > NH2 > F > Cl > OH or Br. Partial density of states and graphical representation of HOMO and LUMO show that the Br and OH groups significantly lower gap energies, which is confirmed while observing the clear dominance of Br and OH near the HOMO compared with the Ge atoms. Moreover, in addition to the electronic/optical gap, the binding/cohesive energy of OH and Halide-terminated Ge nanoclusters exhibit greater stability compared with other passivants/functional groups.