The proposals, which are to be laid out in a draft law, will allow for telephone companies to retain information on the IP-addresses of customers for up to ten weeks and is intended to combat terrorism and organized crime.
Maas, a Social Democratic Party (SPD) member, also outlined how companies will have the power to save data on the location of calls made on mobile phones for up to four weeks.
But under the proposals no data on e-mails nor the content of any form of communications can be retained.
Markus Beckedahl, digital rights activist and founder of netzpolitik, told The Local that the proposal “in no way” gets the balance right between security and privacy.
“With this proposal the government is crossing a red line. By retaining the data of every Germany citizen they are putting everyone under suspicion.”
“They are opening a Pandora's box. In the future the discussion will not be over closing the programme down but over broadening it.”
“There is absolutely no proof” to suggest that data retention is effective or that it has prevented terrorist attacks in the past, he said.
“Politicians use it as a form of insurance for their careers, so that in the event of an attack they can point to it as evidence that they have taken measures [against terrorism].”
The issue had caused serious division within the coalition government and led to a tense stand-off over a period of months between Maas and Interior Minister Thomas de Maiziere.
In the wake of the January terror attacks in Paris on the offices of the satirical magazine Charlie Hebdo and a kosher supermarket, de Maiziere of the Christian Democrats (CDU) pushed for stronger powers for the security services to examine digital data.
But Maas announced that data retention would not have prevented such an attack happening in Germany.
The impasse was broken after Maas' party chief and Vice-Chancellor Sigmar Gabriel weighed in in favour of greater powers of data retention.
He claimed earlier in April that data retention would have prevented a string of murders carried out by the National Socialist Underground (NSU), a neo-Nazi terror cell, and encouraged his justice minister to find a compromise.
The law will have to be drafted within tight legal constraints.
A similar piece of legislation was struck down by the constitutional court in 2010 after it was deemed not to satisfy the principle of proportionality – that is, its erosion of personal privacy was seen to outweigh its usefulness in combating terrorism.
But that law was much broader in scope, allowing for data to be retained for up to six months, and the ruling did not exclude the use of data retention under a new piece of legislation.
The government also hope that the proposal will fit within a framework set out by the European Court of Justice in a ruling from April 2014.
De Maiziere stated on Wednseday that the proposals were “a good and smart compromise” and that they offered a “workable and substantial” solution.
“The security of civilians will be improved and at the same time civil liberties protected,” the interior minister said, adding that the rules would constitute a “fundamental improvement for the work of the law enforcement agencies.”
Gabriel commented that “with this proposal we can quickly rationalize a debate which has all too often been emotionally and ideologically driven.”
“Heiko Maas has shown with these guidelines that there is no contradiction between security and freedom.”