The new rule, which will enter in force in July 2017 if it secures parliamentary backing, is part of a package of measures aimed at offering greater protection to sex workers.
Among other measures agreed under the package are tougher rules governing the ownership of brothels.
Any prior convictions of proprietors would be examined to prevent human traffickers from running such establishments.
Prostitutes would be banned from living in the same rooms where they ply their trade.
They would also be required to meet regularly with "counsellors" from the health services.
Prostitution was made legal in Germany in 2002 and the legislation in place offers sex workers a right to public unemployment insurance as well as medical coverage.
However, the only official report released since found that there had been no real "improvement in the social protection of prostitutes", with only one percent of sexworkers having a work contract.