Defence Ministry chief Katrin Suder told party leaders in the Bundestag [German parliament] that the three countries hope to sign an agreement to launch the scheme later this year.
A study into how the drone should be developed will be set up at the same time.
The European countries want to build a medium-sized drone capable of carrying weapons, ready for use by the year 2025.
Between now and then, the government hopes to buy or rent American or Israeli-made unmanned aircraft.
Germany already uses Israeli “Heron 1” drones, which are too small to carry weapons, and extended its contract to rent them last week.
Green party defence expert Tobias Lindner questioned whether developing a new drone was really necessary.
“The ministry has to explain whether a Europe drone project isn't just a policy to support industry, and why solutions available on the open market aren't adequate,” he said.