The German government decided to free up additional three billion euros ($3.35 billion) for federal states and municipalities to help cope with this year's record influx of refugees and migrants, a joint statement by the ruling coalition issued on Monday said.
At a high-level meeting that lasted more than five hours, leaders from Chancellor Angela Merkel's governing coalition also agreed on a series of other measures, such as speeding up asylum procedures and facilitating the construction of asylum shelters.
In addition to the three billion euros for states and municipalities, the government is planning to free up an additional three billion euros to fund its own expenses, such as paying benefits for asylum seekers, the joint statement said.
The agreement included widening the list of countries deemed "safe", meaning their citizens generally have no claim to asylum, to include Kosovo, Albania and Montenegro. Among those already in that category are Serbia, Macedonia and Bosnia.
The aim is to speed up asylum and extradition procedures for migrants from southeastern Europe, in order to focus on refugees from war-torn countries such as Syria, Iraq and Afghanistan.
The coalition meeting came at the end of a weekend that saw 18,000 refugees entering the country after Germany and Austria had agreed with Hungary to waive rules requiring refugees to register an asylum claim in the first EU country they reach.
Merkel's decision to allow thousands of refugees stranded in Hungary to find a new home in Germany has caused a rift within her conservative bloc with her Bavarian allies accusing her of sending a "totally wrong signal".
Germany expects a record influx of 800,000 migrants and refugees this year, by far the most in the European Union. In August alone, more than 100,000 asylum seekers were registered in Europe's largest economy.