Chancellor Friedrich Merz labelled Russia "the greatest threat to freedom, peace and stability in Europe" and stressed that Germany "must have the largest conventional army on the European side of NATO".
Defence Minister Boris Pistorius said the recruitment drive aimed to attract volunteers to the Bundeswehr but the proposal also includes provisions for compulsory service in case numbers fall short in coming years.
From January 1, a questionnaire will be sent to all young German men and women to assess their fitness, skills and interest in serving, according to a draft law that must still be passed by parliament.
While men must complete it, it will be voluntary for women.
Starting on July 1, 2027, 18-year-old German men will also be required to undergo a mandatory medical examination, even if they do not opt for voluntary military service.
The goal is to create a nationwide "situation report" on military readiness.
In the event of war, conscription, which was suspended in 2011, would automatically reapply, meaning men aged 18 to 60 could be drafted.
There are currently around 182,000 soldiers in the Bundeswehr plus 49,000 reservists. Pistorius is aiming for at least 260,000 troops and 200,000 reservists, in line with NATO targets.
The recruitment drive has featured social media campaigns and includes promises of a salary of at least 2,300 euros ($2,660) a month plus free healthcare and other perks.
- New security council -
Merz has made boosting Germany's military a key priority given heightened tensions with Russia and after US President Donald Trump cast doubt on the future strength of the American security umbrella for Europe.
The German cabinet exceptionally met on Wednesday at the defence ministry, in a surveillance-proofed room dubbed "the submarine", reviving an occasional practice from the Cold War era.
Elsewhere in Germany, weapons-maker Rheinmetall on Wednesday opened Europe's largest munitions plant, with Pistorius, Finance Minister Lars Klingbeil and NATO chief Mark Rutte among the guests.
Taking up 30,000 square metres (323,000 square feet) -- roughly the size of five football pitches -- the factory in Unterluess in northern Germany will be able to produce 350,000 artillery shells a year by 2027.
Germany's new defence build-up has sparked some concern. Outside the defence ministry, a small group of protesters warned against a reintroduction of military conscription.
And about 70 activists of the anti-war group "Disarm Rheinmetall" also staged a sit-in protest outside a Bundeswehr career centre in Cologne.
The cabinet meanwhile also approved a new national security council tasked with analysing the global security situation and developing Germany's responses.
"This body will be a central platform for the government for overarching issues of national security," said Merz.
Ministers also announced new steps to better protect the armed forces against drone surveillance, sabotage and other threats.
Military police will have greater powers to question suspects outside armed forces barracks.
And the military intelligence service will be given greater latitude for counterespionage activities and to do background checks on army recruits, including on their social media accounts.
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