"It's important to us that the reports and news posted on Facebook are reliable," a blog post on the Silicon Valley firm's German website read.
German politicians have warned that populist parties and foreign nations could use fake news to try and influence parliamentary elections slated for September or October.
Facebook's new German initiative targets "unambiguously wrong reports" being shared on the social media platform.
The firm said it would offer a simpler reporting process for users to flag suspected fake news, display warnings next to statements identified as false by independent fact-checking organisations, and cut off advertising revenue to fake news sites presenting themselves as real news organisations.
Stories flagged with a fake news warning will not be eligible to be converted into an ad seen by other users or "promoted" into other users' feeds for a fee.
"We think that independent and transparent fact-checking can be a powerful instrument for journalism," Facebook said.
Nonprofit investigative journalism organisation Correctiv will be the first fact-checking partner in Germany, the firm added, saying that they are "confident" of adding other news organisations in future.
Facebook's latest measures come just days after it announced the creation of a "Journalism Project" aimed at boosting the credibility of the information it circulates.