The planned change in household heating was "urgent", Economy Minister Robert Habeck told reporters at a press conference.
Germany had to "catch up in a short time" on the lag it had built up in the switch to renewable heating, the Green party minister said.
But the policy, which was leaked to local media last week, has added to mounting tensions within the government coalition, over issues including climate and spending.
The liberal FDP has responded angrily to the proposal prepared by the economy and housing ministries, led respectively by the Greens and Social Democrats.
The proposal would essentially accelerate plans already in the coalition deal struck between the parties to ban new heating units that did not produce 65 percent of their energy from renewable sources from 2025.
The new timeline would have "disastrous" economic and social impacts, FDP leader and Finance Minister Christian Lindner told Bild daily last week.
"The plans must go back to the drawing board and be fundamentally revised," Lindner said.
The move from fossil fuels to greener technologies, such as heat pumps, would be accompanied by a multi-billion euro package of financial support for switchers, Habeck said.
"Climate neutrality must not and will not become a social problem," he said, promising greater help for those who needed it most.
There were still a number of issues to be clarified before a final draft was put forward, Habeck said. These included whether industry would be able to meet increased demand for heat pumps, a challenge which Habeck said he thought was achievable.
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