Construction of the elaborate €552 million palace, known as the Stadtschloss in German, was set to begin in 2011 and take several years, but government sources told daily Rheinische Post that this plan was now in doubt.
The original Baroque palace, a winter residence for Prussian royalty, was damaged during World War II and then demolished by the communist East German government in 1950.
The central Berlin lot, surrounded by some of the city's most prominent landmarks, has been transformed into a pleasant interim park popular with locals. Nearby, the Temporäre Kunsthalle Berlin, or "Temporary Art Hall Berlin," has been featuring art by contemporary Berlin-based artists.
According to a survey conducted by the Forsa Institute for Berlin daily Berliner Zeitung on Monday, a whopping 80 percent of Berliners believe the German government should scrap plans to rebuild the palace altogether due to budgetary belt-tightening.
But on Wednesday, the Federal Minister of Transport, Building and Urban Affairs Peter Ramsauer, told broadcaster ZDF that the German parliament supported the project. He insisted construction would begin in the coming year and be completed in 2017.