"The cabinet has approved sending navy troops to patrol Lebanon's seaways. We are no longer only a spectator in the region," Chancellor Angela Merkel told reporters.
"Our mission is to prevent weapons or parts of weapons being smuggled into Lebanon by sea," she said.
The decision is expected to be approved by the lower house of parliament next week and follows weeks of debate within Merkel's ruling coalition and wrangling with the Lebanese government about the marine force's mandate.
"This is not an intervention like any other. We did not take the decision lightly. This is a historic step," Ms Merkel said.
Deployment
Defence Minister Franz-Josef Jung said Germany would deploy 1,500 sailors, 400 support staff, 100 air troops and 100 training officers. Another 300 men will be on standby.
The force will be equipped with two frigates, two support vessels and four speed boats and its mandate will initially run until August 2007, but could be extended, Mr Jung said.
Under deployment rules, the Germans will be allowed to confront suspect ships anywhere in Lebanese waters and to use force, unlike French, Greek and Italian ships currently patrolling the coast on an interim basis.
"We have a robust but not an aggressive mandate," Mr Jung said.
"We will control the whole of Lebanon's waters, within 50 sea miles of the coast. We will have the right to use force against vessels that show resistance."
The marine force’s aim is to stop weapons reaching the Hezbollah fighters in Lebanon by sea, thereby reinforcing the ceasefire between the radical Shiite organisation and Israel.
Back down
Germany's mandate has been the subject of long negotiations between the two governments after Beirut was reluctant to allow German ships within 13 kilometres (seven miles) of the Lebanese coast.
That drew a sharp warning from Ms Merkel who said she would not risk German forces on a mission that was unlikely to achieve its aim. Beirut backed down on Tuesday.
"We will now be able to fulfil our aims," the chancellor said, adding that Denmark, Norway, Sweden and the Netherlands would also contribute to the marine force.
Germany has ruled out sending ground troops to Lebanon, saying it needed to avoid a situation where Germans and Jews would confront each other in a reminder of the events of World War Two.