Europe's biggest economy would borrow €96.2 billion, abandoning the country's constitutionally-enshrined “debt brake” rule, said Olaf Scholz.
“For 2020 and 2021, we are obliged to ask the parliament to authorise us to borrow an unusually large amount,” Scholz said.
Germany expects to reinstate the no new debt rule in 2022, Scholz said.
“We're not going to save during the crisis,” he said.
Germany had come into the pandemic with a well-stocked war chest, following several years of strong surpluses amid record low unemployment.
But the government's room for manoeuvre is shrinking, as tax revenue will fall below expectations as the economy takes a hit during the crisis.
Berlin is already set to borrow €218 billion in 2020.
The devastating impact of the pandemic has forced Chancellor Angela Merkel's government to abandon its years-long habit of running a “black zero” balanced budget, a rule introduced at the height of the financial crisis in 2009.
Merkel's ruling coalition has pledged more than a trillion euros in aid to shield German companies and workers from the virus fallout, including through loans, grants and subsidised shorter-hours programmes.
The German economy is expected to contract by 5.8 percent in 2020, the deepest slump in its post-war history, before rebounding by 4.4 percent in 2021.