The film, starring Sibel Kekilli, the young actor who made her name in the 2004 film Head-On (Gegen die Wand), was chosen by a jury of Germany's film export office.
The jury described it as "an extremely well-written, atmospherically directed and moving film with outstanding acting performances. The film treats the struggle of a young German-Turkish mother for self-determination in two value systems in a highly dramatic and subtle manner."
'When We Leave' has been hailed with near-universal acclaim at the 35 film festivals where it has been screened world-wide, winning the best film prize at the Tribeca festival in New York. Its premiere was in the 2010 Berlin film festival in February.
Kekilli also won the best actress award at the German Film Awards, and the film is also one of three nominees for the Prix Lux, the European parliament's film awards.
Director Aladag said, "It is an unbelievable honour that our film has been chosen by the German committee. It has always been my aim to make a universal film that can reach and touch people across ethnic, cultural and language barriers."
The Academy of Motion Pictures Arts and Sciences will choose five foreign language film nominations for the Oscar on January 25, 2011. Next year's Oscars ceremony takes place on February 27, 2011.
'When We Leave' will be released in the US in February 2011.