Spaniard Larrazabal shot a superb nine-under-par second round of 63 to earn a four-way share of the lead on Friday, and he maintained his form to move three strokes clear of the rest of the field after round three.
The 31-year-old is yet to drop a shot in Cologne, but he made a slow start to Saturday's round as he picked up just a single birdie on the front nine.
However, four shots gained from his last six holes saw him move into a commanding position on 17 under par heading into the final day at the Golf Club Gut Larchenhof.
His lead had appeared to be under threat earlier in the day as Australia's Green registered the lowest round of the week - a 10-under-par 62.
That performance saw him leap 51 places into second and three shots adrift of Larrazabal, though he did hold the lead momentarily earlier in the day.
Rafa Cabrera-Bello, Danny Willett and Emiliano Grillo, who all held a share of the lead at close of play on Friday, all failed to maintain their momentum as they relinquished their partial grip on top spot.
Cabrera-Bello and Grillo both posted their worst round of the week to complete the course in 70 strokes, now forming part of an eight-way tie for second, while Willett took one shot more and dropped to a tie for 10th.
Leader Larrazabal will not be resting on his laurels despite his comfortable lead, with the likes of Henrik Stenson and Thomas Bjorn - both among those locked in second - having climbed into contention with rounds of 66 on Saturday.
Due to the threat of a storm on Sunday, the final round will start earlier than scheduled with a two-tee set-up.