"Libya is not a classic development country," Niebel told Friday's edition of the Rheinische Post newspaper.
He said Germany had already agreed in June to offer €7 million in emergency aid for the Libyan population. "There won't be any more bilateral development cooperation on top of that," he said.
He said that even though the country was facing a humanitarian crisis following the overthrow of Muammar Qaddafi's dictatorial regime, it had enough money of its own to face it.
Qaddafi's assets around the world are currently in the process of being freed up so that Libya's new government, the National Transitional Council, can pay for essential services and persuade civil servants to return to work.
Niebel said Libya is now able to buy its own technical support, and was hopeful that they would buy it from Germany. He said it was important now that German industry be persuaded to make long-term investments in Libya.
The new Libyan ambassador Aly Masednah El-Kothany said Friday that Libya was relying on Germany more for technical than financial support.
He added that Germany's controversial refusal to take part in the NATO mission against Qaddafi would not damage their relationship.
"We're talking about today and tomorrow," he told state broadcaster ARD. "Libyans value German quality and reliability."
He said he expected Germany to aid Libya's process of democratization and protection of human rights.