Under a deal struck by interior ministers from the federal level and Germany's 16 states, authorities will be able to take away ID cards from alleged Islamic militants to stop them from leaving the country.
Until now it has been possible to make passports invalid to keep German citizens from travelling abroad.
But because German citizens can use their national ID card to travel to Turkey, a frequent jumping-off point for Iraq and Syria, Germany is moving to close the loophole.
"We don't want terrorism to be exported from Germany," Interior Minister Thomas de Maiziere said.
He added that Berlin aimed at all costs to head off the return of fighters who had gained experience and training in the region to Germany, where they could mount attacks.
De Maiziere said Germany also wanted to stem a flow of Kurds aiming to join the battle against the extremist group Islamic State (IS) for fear they would return home radicalised.
Those affected will receive a substitute document to be used for identification in Germany.
The ministers also agreed to focus on efforts to prevent young Muslims from succumbing to the lure of Islamic extremists in the first place, enlisting youth groups, schools, mosques and imams in the efforts.
Concerns are mounting in Europe about the growing national security threat posed by jihadists returning from war-ravaged Syria and Iraq.
Security sources estimate that more than 450 Germans have travelled to the region, many aiming to join combat on the side of IS militants.
More than 150 of them have returned to Germany.