Regex.Unescape
did the trick:
System.Text.RegularExpressions.Regex.Unescape(@"Sch\u00f6nen");
Note that you need to be careful when testing your variants or writing unit tests: "Sch\u00f6nen"
is already "Schönen"
. You need @
in front of string to treat \u00f6
as part of the string.