The results of a newly developed annular cryogenic phonon-mediated active veto detector are discussed which shows a significant reduction of radioactivity-induced backgrounds in rare event search experiments. The veto detector is made up of germanium weighing ∼500 g with an outer diameter of 76 mm and an inner diameter of 28 mm. The detector can host a 25 mm diameter germanium inner target detector of mass ∼10 g. A GEANT4 simulation with the active veto and inner target detector shows a gamma background reduction of 50 - 80% which is further improved (> 90%) with 4pi veto coverage. Experimental measurements with the detector assembly agree well with the simulation.