Germany's troops could take on a much more wide-ranging role in the world following a review of security doctrine approved by the German cabinet.
Germany is expanding its horizons
The move takes Germany a step further from the pacifist military guidelines adopted after World War II.
German troops are currently engaged in Afghanistan, but in reconstruction rather than combat.
The review says that "an important role in the future shaping of Europe and beyond falls on the united Germany".
However, the document, drawn up by the government of Chancellor Angela Merkel, envisages that military might will play only one part of the country's security policy.
The foreign and international development departments have also been involved in drafting the paper.
The 133-page document - the first review of the German military in 12 years - says the relationship with the US remains at the heart of defence policy.
Links between the two countries were strained when Germany led opposition to the US-led invasion of Iraq.
"Trans-Atlantic relations remain the basis of German and European common security... [and require] constant care and deepening through mutual consultation and agreed action," the draft says.
The document foresees a wider involvement in peacekeeping operations.
"International conflict prevention and crisis management, including the fight against international terrorism, are the more probable tasks in the foreseeable future," it says.
The launch of the plan, however, was overshadowed by a row that erupted after pictures emerged apparently showing German soldiers in Afghanistan posing with a human skull.
German Defence Minister Franz Josef Jung expressed disgust at the photos and ordered an immediate investigation.