"I will end my membership," Aigner told a news conference after talks with Facebook's policy director for Europe, Richard Allan, in Berlin. "First I have to inform all my 'friends' ... but it will happen very soon."
"My talks today with the Facebook executive unfortunately confirmed my scepticism. Many data privacy settings really have been improved, or are being improved, and improvements are due to follow.
"But from today's point of view the improvements at the end of the day are no way near sufficient to protect the users' privacy or to comply with German law."
She said that Germany's data protection agency was examining the settings and that she believed Facebook, which has 400 million users worldwide, could find itself slapped with fines in Europe's most populous country.
Aigner, a member of Chancellor Angela Merkel's conservative Bavarian allies, had already threatened such a move in April in an open letter to Facebook founder Mark Zuckerberg. That came after Facebook sparked criticism from privacy groups and US and European lawmakers by allowing partner websites to use members' data.
The move was part of efforts by Zuckerberg to turn his massively successful website into a profitable business.
In response, Facebook last Thursday unveiled a redesigned privacy-settings page in a bid to "significantly reduce" the amount of information visible to everyone. Facebook also said it was giving users more control over how outside applications or websites access information.
But critics say the changes don't go far enough. In particular they want Facebook to make all information private by default and then let people designate what information they wish to share in a so-called "opt-in" model.
At present, users have to "opt out" if they do not wish others to see information.
"Previously I was a big fan of Facebook and the idea of interacting with friends, acquaintances and colleagues around the world enriches our lives, and will continue to do so in the future," Aigner said.
"But we as users must be able to be in control of our data at any time. It cannot be that our data, that sensitive personal information are made available, passed on and sold without our being asked."
She also accused Facebook of making its privacy settings "deliberately" complicated.
"All in all, checking the data protection settings is not very easy. A tax return is easier to read," she said.
Partly for historical reasons, Germany is particularly sensitive about privacy issues, with campaigners bristling at plans by US Internet giant Google to launch its "Street View" service in Germany later this year.
Using specially equipped vehicles, "Street View," already available for cities in the United States, Japan, Australia and in some parts of Europe, allows users to view panoramic still photos at street level.
Officials and campaigners in Germany were concerned that thieves could use pictures of private houses to gain illegal access and that photos of people were being published without their consent.
Google said last month it was halting the collection of WiFi network information for "Street View" after admitting it inadvertently gathered personal data sent via unsecured systems.